Asian and US stocks drop, yen gains after N. Korea's missile launch

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent while Japan's Nikkei fell 0.6 percent.

TOKYO: U.S. stock futures and Asian stocks dipped and the yen rose after North Korea fired another missile over Japan into the Pacific Ocean on Friday, in a sign that Pyongyang remains defiant despite tightening international sanctions.

U.S. stock futures fell 0.2 percent while the dollar fell to as low as 109.55 yen from around 110.20 in late U.S. trade on Thursday. It last stood at 109.98 yen.

Japan's Nikkei was almost flat while South Korea's Kospi and Australia's main index both dipped 0.3 percent.

MSCI's Asia-Pacific share index excluding Japan was down 0.1 percent.

Japan said the North Korean missile fell into sea about 2,000 km (1,240 miles) east of Hokkaido.

The launch came only days after the U.N. Security Council approved new sanctions against Pyongyang for its Sept. 3 nuclear test.

Still, markets are growing used to North Korea's sabre-rattling.

"There have been reports suggesting North Korea is preparing a missile launch, so this was by no means a surprise," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

"Also, in the past, markets have stabilised within a few days after North Korea's missile launch. So in a way this seems like something markets have already experienced before, thus producing limited reaction," he added.

Before North Korea's missile launch, U.S. bond yields had risen while Wall Street shares were mixed after U.S. consumer inflation data rekindled expectations that the Federal Reserve will raise interest rates in December.

The consumer price index rose 0.4 percent from previous month in August, faster than the 0.3 percent increase forecast among analysts polled by Reuters.

The so-called core CPI, which excludes volatile energy and food prices, rose 0.2 percent. On a 12-month basis, it was 1.7 percent, above the 1.6 percent forecast by economists.

Following the data, the U.S. Fed funds rate futures were pricing in about 45 percent chance the Fed will raise rates by December, compared to around 25 percent at the start of this week.

The 10-year U.S. Treasuries yield rose to as high as 2.225 percent. It slipped back to 2.178 percent in Asia on Friday.

In currency markets, the dollar failed to capitalise on the data as its rally since the start of the week ran out of steam.

The euro traded at $1.1923 , off Thursday's two-week low of $1.18365.

The British pound held firm after the Bank of England warned it might raise interest rates for the first time in a decade in the "coming months" if the economy and price pressures keep growing.

The pound hit a one-year high of $1.3407 on Thursday and last stood at $1.3401 .

Oil prices jumped, with international benchmark Brent futures hitting a five-month high, supported by a string of reports forecast the market would tighten further as fuel demand increased.

Brent crude futures traded at $55.27 per barrel after hitting a high of $55.99 on Thursday.

Elsewhere, bitcoin tumbled 16 percent on Thursday as Chinese news outlet Yicai reported that the country plans to shut down all bitcoin exchanges by the end of September.

BTCChina, one of China's top three exchanges, said on Thursday that it would stop all trading from Sept. 30. - Reuters