(Reuters) - Asian stocks and currencies dropped on Wednesday while bonds rose after North Korea test-fired missiles, including a long-range Taepodong-2, heightening geopolitical risks and unnerving investors.
Gold, traditionally a haven in times of crisis, rose more than 1 percent to a one-month high of $629.75 an ounce and London Brent crude oil rose 0.6 percent to about $72.94 per barrel, reports Trend.
"It's obviously very bad for risky assets, so the initial reaction is probably right: the stock market falling and people buying up short-term JGBs," said Akihiko Yokoyama, a bond strategist at JPMorgan Securities, referring to Japanese government bonds.
Japan's Nikkei stock average was 0.6 percent lower at 15,546.78 at 0140 GMT, pulling further back from a one-month high on Tuesday.
South Korea's key KOSPI slumped as much as 2 percent on news that its neighbor had launched at least six missiles on Wednesday, a move the United States called provocative and in defiance of the international community.
After an initial slump, the KOSPI firmed to stand down 0.7 percent by 0145 GMT.
Taiwan's benchmark index was off 0.4 percent.
The yen fell to a low of 115.23 per dollar and dropped to a record low of 147.31 per euro, dragging other Asian currencies lower.
The South Korean won fell as low as 948.9 per dollar, more than half a percent down from late Asian trades on Tuesday, before recovering after the vice finance minister vowed to take necessary action to stabilize the currency market.
Japanese government bond futures rose 0.23 point in early trade to 131.47, extending a recovery from a six-year low hit in the previous session. The futures later turned lower on the day as the market shifted its focus to an expected Bank of Japan rate rise next week.
South Korean bonds also got a lift after the missile reports.
Two-year JGB yields fell 1.5 basis points to 0.855 percent while 5-year yields dropped 2.5 basis points to 1.45 percent, just a day after hitting a life time peak of 1.50 percent.
The yield on the benchmark U.S. Treasury slid to 5.147 percent, slightly lower than 5.155 percent on Tuesday.
North Korea launched five short-range missiles and the Taepodong-2, which might be capable of reaching Alaska. The long-range missile apparently failed about 40 seconds into its test flight.
"The news is negative as it reminds investors, including foreigners, of geopolitical risk, which has been behind the scenes for quite some time," said Goro Kumagai, senior strategist at Mizuho Securities.
The United Nations Security Council plans to meet in a closed session to discuss the North Korean missile test following a request by Japan's U.N. ambassador, a French spokesman said.
The United States said it will discuss prospects for hauling North Korea before the United Nations Security Council over its missile firings, a move that could pave the way toward U.N. sanctions on North Korea.
Japan said it may consider economic sanctions against North Korea while South Korea's Yonhap news service said the South Korean military had stepped up its alert level.
"Investors could flee stock markets in search of safer assets," said Kim Jeong-hwan, a market strategist at Woori Investment and Securities.
In Tokyo, the stocks decline was led by consumer finance company Credit Saison which slumped 4.3 percent. Shares of automaker Honda Motor Co. lost 1.9 percent and those of industrial robots maker Fanuc dropped 1.1 percent.
In South Korea, top semiconductor maker Samsung Electronics lost 1 percent and SK Telecom fell 1.3 percent.
Shares in the affiliates of Hyundai Group, a conglomerate spearheading South Korea's business projects in North Korea, also suffered losses. The group had invested more than $1 billion in projects ranging from a mountain resort to an industrial park in the communist state.
Hyundai Merchant Marine Co. fell 2.4 percent and Hyundai Securities lost 3.2 percent.