Asian stocks fell and the won slumped to a one-month low on speculation North Korea will retaliate to artillery drills by its neighbor. Treasuries and the dollar rose as demand for U.S. debt as a haven increased.
The MSCI Asia Pacific Index fell 0.7 percent to 132.73 as of 1:16 p.m. in Hong Kong. South Korea’s Kospi Index lost 0.7 percent and the won dropped 0.9 percent to 1,163.30 per dollar. Ten-year Treasuries rose for a third day, while Standard & Poor’s 500 Index futures decreased 0.3 percent. The dollar appreciated to $1.3149 against the euro in Tokyo trading from $1.3188 in New York last week.
Investors became more skittish as South Korea said it will proceed with a live-firing drill and the United Nations Security Council failed to agree on steps to ease tension on the peninsula. The dollar also strengthened against the euro before reports this week that economists say will show U.S. economic growth accelerated and personal spending climbed.
www.bloomberg.com/news/articles/2010-12-20/south-korean-stocks-won-fall-on-live-fire-military-drills-euro-weakens