muted market reactions to big events
means one of two things
investors are concluded does not matter
or they're unsure how to quantify it in
the case of North Korea's nuclear test
on Sunday it's the latter on Monday
havens including gold and the yen rose
while Japanese and Korean stocks fell
but all the moves were relatively
restrained Japan South Korea and China
between them represent the world's 2nd
and 3rd largest stock markets and the
two biggest countries in the emerging
markets universe Japan and China also
both key players in global debt markets
in the yen is the third most traded
currency in the world states with global
investors are indeed high although
foreigners limited interest in China's
onshore markets reduces their
significance in portfolios they often
say on the contrary signals - on Monday
Shanghai and Shenzhen closed nor 0.4 in
nor point 6% higher even as Tokyo fell
one percent and Seoul dropped at one
point to assessing the markets risk
posed by North Korea involves a
situation that's once familiar yet also
terrifyingly complex investors have
spent decades factoring in the effects
of hostilities between the rogue state
and the outside world a recent report by
Nomura which puts tensions at the
highest since 1994 identifies ten
outcomes under four scenarios they span
negotiations to US intervention or even
in military coup a few of any analysts
believe outright war is the most likely
outcome even those factoring in the
potential for actual conflict struggle
to measure it in spite of their analysis
Nomura's team included the effect on
korean stocks from a walk would likely
be too catastrophic to deal in any
specifics the scale of Monday's moves in
the yen tokyo stocks gold in the Korean
Won would not rank as a top 10 event for
any of them for 2017 Monday - US bank
holiday would have played a part - in
damping the reception with only limited
trading Treasuries and no Wall Street
action - look - the only market with an
outsize reaction on Monday was the
Korean stock market is 1.2 percent fall
ranks as its fourth worst day this year
the other ones the worst ones came in
July and August
now this suggests that even as more
global assets are holding their no
Korean investors are starting to price
in some scarier outcome