Wall Street put a floor under global equities on Friday after a weak inflation reading brought investors back into USA stocks even as tensions between the United States and North Korea continued to escalate, though that tension still drove safe-haven buying of gold and the yen.
But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in nearly four months versus the dollar at 108.73 yen.
TORONTO, Aug 10 (Reuters) - Canada's main stock index hit its lowest close in a month on Thursday as oil prices fell and investors sought refuge in safe-haven assets amid rising tensions between the United States and North Korea. Financials .SPSY fell the most, down about 1 percent.
Emerging market stocks lost 1.27 percent. Japan was closed on a public holiday.
"This situation is beginning to develop into this generation's Cuban Missile crisis moment, with recent leaked intelligence reports alleging that North Korea now has miniaturised its nuclear warheads, which extends the range of its missiles, and potentially brings US targets into reach", ING's chief Asia economist Robert Carnell said in a research note on Friday.
Trump's threat earlier this week, to unleash "fire and fury" on Pyongyang if it attacked, was ultimately dismissed as bluster by many investors. These have ranged from an investigation into Russia's possible interference in the 2016 USA presidential election, to concerns about China's risky debt levels, to stubbornly low inflation in the U.S.
A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalization drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday. The index closed at 16.04 overnight, the highest level since November 8, when Trump was elected president. It was at its highest level in more than seven months.
The pan-European FTSEurofirst 300 index lost 1.06 percent and MSCI's gauge of stocks across the globe shed 0.17 percent.
US stock futures were 0.1 percent lower on Friday.
The dollar extended losses against the yen to hit a new two-month low.
CURRENCIES: The euro slipped 0.1 percent to $1.1176 while the dollar was steady at 109.20 yen.
Japan is the world's biggest creditor nation and there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty.
In bond markets, the yield in U.S. Treasuries fell, also pressured by the lowered expectations for a Fed move.
US crude oil futures settled almost 2 percent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers.
Against the Swiss Franc, the dollar erased earlier losses to traded little changed on the day.
Data showed the number of Americans filing for unemployment benefits unexpectedly rose last week, but the underlying trend remained consistent with a tightening labor market.
Markets are now focused on US consumer price data for July, due later in the session.
The 30-year bond last /32 in price to yield 2.7933 percent, from 2.794 percent late on Thursday.
The price of gold also surged for the second day in a row as the December bullion contract advanced US$10.80 to US$1,290.10 an ounce.
Nevsun Resources Ltd offset some of the material group's gains, plunging 16.4 percent to C$2.75 after the company reported disappointing quarterly results.
United States crude rose 0.41 percent to $48.79 per barrel and Brent was last at $52.01, up 0.21 percent. It is poised to end the week down 1.7 percent.