US-North Korea tensions weigh on Asia markets as Trump doubles down on rhetoric

U.S.-North Korea geopolitical tensions came to the fore once again as Asian stocks remained pressured and demand for safe haven assets remained intact in Friday trade.

South Korea's benchmark Kospi (Korea Stock Exchange: .KS11) index fell 1.69 percent, driven by losses in tech and retail stocks. Samsung Electronics and SK Hynix sank 2.61 percent and 4.04 percent respectively, while department store operator Shinsegae tumbled 8.87 percent.

In Australia, the S&P/ASX 200 (ASX: .AXJO) was down 1.13 percent, with the index's move lower driven by broad-based losses across most sub-indexes although gold stocks climbed. The heavily-weighted financials sub-index was 1.40 percent lower.

Markets in greater China mirrored the slide in global equities. Hong Kong's Hang Seng Index (Hong Kong Stock Exchange: .HSI) was down 1.22 percent. On the mainland, the Shanghai Composite (Shanghai Stock Exchange: .SSEC) declined 0.68 percent and the Shenzhen Composite shed 0.521 percent.

Japan markets are closed for the Mountain Day holiday.

After previously warning of "fire and fury" if North Korea persisted in threatening the U.S., President Donald Trump said Thursday his statement "wasn't tough enough." While he did not comment on what he meant by that statement, Trump said that North Korea should be "very, very nervous" if it "(did) anything in terms of even thinking about an attack."

Gold prices eased slightly after rising to their highest levels in more than two months on safe haven demand. Spot gold traded traded as high as $1,288.92 an ounce on Friday, compared to levels around the $1,257 mark earlier this week. The yellow metal traded at $1,285.64 an ounce at 9:53 a.m. HK/SIN, a tad below the $1,285 level seen Thursday.

Demand for the Japanese yen (Exchange: JPY=) remained supported, with the dollar extending losses made in the Thursday session. The Japanese currency last traded at 109.07 yen to the dollar, compared to levels around the 110 handle seen earlier in the week.

Yields of the benchmark 10-year U.S. Treasury fell to a one-and-a-half month low of around 2.20 percent in the Thursday session. Ten-year yields were around 2.25 percent earlier in the week.

In corporate news, Noble Group (Singapore Exchange: NOBG-SG) announced a net loss of $1.9 billion in the first half of 2017. Noble has been forced to shuffle management, sell down assets and slash costs to boost liquidity. Despite the losses, Noble shares rose 17.14 percent.

Also of note, Japan's SoftBank Group (Tokyo Stock Exchange: 4726.T-JP) has invested almost $2.5 billion in India-based e-commerce player Flipkart. The funding will come from SoftBank's Vision Fund in the form of share purchases, Reuters reported.

Meanwhile, the dollar index (New York Board of Trade (Futures): =USD), which tracks the dollar against a basket of six major currencies, slipped on the back of weaker-than-expected U.S. producer prices . The index stood at 93.371 at 9:38 a.m. HK/SIN, below levels around the 93.4 handle seen in the previous session. Ahead, the release of U.S. July CPI due during the U.S. trading day is expected to influence the direction of the dollar.

"The drop in PPI signals potential weakness in CPI, but even if consumer prices tick higher like economist[s] anticipate, it won't be enough because the Federal Reserve doesn't feel good about inflation," BK Asset Management Managing Director Kathy Lien said in a note.

Heightened geopolitical tensions between the U.S. and North Korea also meant that the dollar/yen pair would have a difficult time responding to positive data, Lien added.

In other currency market news, the Philippine peso (Exchange: PHP=) fell to an 11-year low against the dollar, according to Reuters. The Philippine currency traded at 51.069 peso to the dollar at 9:40 a.m. HK/SIN, breaching the 50 level seen since mid-June.

Oil prices steadied after slumping more than 1.5 percent overnight on oversupply concerns and the move lower on Wall Street, Reuters reported. Brent crude edged down by 0.13 percent to trade at $51.82 a barrel and U.S. crude shed 0.06 percent to trade at $48.56.

In economic news, second-quarter Singapore GDP growth was revised upwards to 2.2 percent compared to the previous quarter, above an earlier estimate of 0.4 percent growth. The figure reflected a 2.9 percent rise compared to one year ago. The beat in GDP growth gave the Singapore dollar a slight boost: The currency traded at S$1.3623 to the dollar at 8:31 a.m. HK/SIN compared to levels around S$1.3634 seen before the release.

The economic calendar for Asia is fairly light (all times in HK/SIN):

• 1:00 p.m.: Singapore June retail sales

• 4:30 p.m.: Hong Kong second-quarter GDP

Markets stateside tumbled on the back of the U.S.-North Korea geopolitical tensions, with the Dow Jones industrial average falling 0.93 percent to close at 21,844.01. The Nasdaq dropped 2.13 percent, or 135.46 points, to finish at 6,216.87.

— CNBC's Leslie Shaffer contributed to this report.

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