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Asia stocks, US$ extend slide as US-North Korea tensions intensify

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S&P closes barely lower despite North Korea tensions

Asked how Moscow would act in case of a military conflict between the USA and the North, Lavrov answered it would do everything it could to prevent the worst-case scenario.

The MSCI World index .MIWD00000PUS was slightly lower, extending Thursday's 1.1 percent drop, its biggest one-day slide since May 17, as U.S. President Donald Trump stepped up his rhetoric against North Korea.

The dollar last changed hands at 108.96 yen, down 0.2 percent.

Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger.

S&P 500 e-mini futures were down 0.2 percent, hinting at weakness on Wall Street later in the day.

"What has changed this time is that the scary threats and war of words between the USA and North Korea have intensified to the point that markets can't ignore it", said Shane Oliver, head of investment strategy at AMP Capital in Sydney.

German bond yields fell, gold and the Japanese yen surged and the leveraged bets on higher yielding currencies such as the Australian dollar took a beating.

Today's main focus and event risk for the U.S Dollar, will be the pending inflation report from the United States Federal Reserve, which should offer fresh clues on the pace of monetary tightening.

South Korea's Kospi sank 1.7 percent to 2,319.83 and Hong Kong's Hang Seng shed 1.8 percent to 26,946.81.

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The Swiss franc and Japanese yen are often sought out in times of geopolitical tension or global financial stress, partly because both countries have big current account surpluses. Shanghai Composite Index tumbled 1.9 percent to 3,201.45.

The Yen gained further ground against the US Dollar during trading on Friday, with the USDJPY dipping below 109.00 for the first time since mid-June.

"We're not very oversold yet so the market still has more downside left to it", said Robert Pavlik, chief market strategist at Boston Private Wealth in NY. The Russell 2000 index gave up 1.7 percent to 1,372.54.

Nordstrom Inc.(JWN) shares rose 1.6% after the retailer late Thursday posted earnings that beat expectations (http://www.marketwatch.com/story/nordstrom-shares-rise-after-retailer-tops-views-sales-rise-2017-08-10), along with a sales rise. It is set for a weekly gain of 2.4 percent.

The trade deficit narrowed in June from the previous month and imports fell 2.5 percent from a year earlier.

"Yuan is expected to remain relatively steady or strong compared to regional peers", Scotiabank said in a note on Thursday.

After touching a more than two-month high, spot gold last added 0.1 percent to $1,287.18 an ounce.

USA crude oil crude futures CLc1 were little changed at $48.59 per barrel.

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