Stock markets took the brunt of risk-averse trading on Wednesday after an overnight escalation of tensions between the US and North Korea forced investors into haven assets such as gold, Treasuries and the Swiss franc.
The mood on markets was decidedly risk off leaving stock markets lower. The FTSE All World index was down 0.3% in London's morning trade.
Overnight the Dow Jones Industrial Average on Wall Street fell 0.2% to 22,085.34, ending a winning streak of 10-consecutive record high closes.
The sell off in stocks and flight to safety gathered pace in early European trade as the already cool relationship between the US and North Korea turned icy following hard-nosed rhetoric from both nations.
President Trump had responded to reports that Pyongyang had made a breakthrough in its atomic weapons programme, telling reporters that "North Korea best not make any more threats" to the US.
This was followed by threats from North Korea of a strike on the US Pacific territory of Guam, a small island of less than 170,000 people about 2,000km south of Japan.
Trump then said such a move would be met "with fire and fury like the world had never seen".
Stock markets fall
Stocks in Tokyo, one of the nearest capitals to Pyongyang, fell 1.3% to 19,738.71, while in Europe, the FTSE 100 lost 0.6% in morning trade, and the CAC 40 in Paris fell 1.2%.
In currency markets, the South Korean won was among the worst hit, falling 0.9% to 1,135.18 against the dollar as its Northern neighbour's tough talking intensified.
Swissie and yen havens sought
But Japan's yen was among the best performing. Its stable political and economic policies have long marked yen assets out as havens during times of geopolitical tensions and market turbulence. The yen was up 0.7% vs the dollar at Y110.20 and was 0.7% higher against the euro at Y128.74.
Switzerland's currency the franc also has a strong reputation for safety in times of turmoil. The franc was up 1.1% against the dollar at SF0.9639 and was 1.2% higher vs the euro at SF1.1311.
"The overnight price action provides a good guide for a likely trading pattern in the case of further escalation – being long an equally-weighted basket of yen and franc vs short won should do well under such circumstances," said Chris Turner, head of foreign exchange strategy at ING.
Safety in gold and Treasuries
Investors were also sheltering out the storm in other traditional havens.
Gold and other precious metals made strong gains. On Comex, the gold price climbed 0.9% to $1,274.30 an ounce, while silver rose 1.4% to $16.61 and platinum added 0.4% to $976.15.
Treasury yields fell as investors sought safety in the haven of the US bond market. When prices of bonds rise, yields fall.
The benchmark 10-year yield fell 3 basis points to 2.25% while the two-year yield lost 2bps to 1.35%.