TOKYO — The yen rose and South Korea’s won slipped Wednesday as North Korea’s claim that it conducted a successful hydrogen bomb test added to concerns about Middle East tensions and mainland China’s economy. Pyongyang said it carried out a nuclear test — its fourth — after seismologists detected a 5.1 magnitude tremor next to its main atomic test site in the northeast of the country. The U.S. dollar slipped to 118.44 yen, its lowest level since October, on initial reports of the quake but later regained some ground to sit at 118.64 yen shortly after North Korea confirmed its test. It is still well down from 119.06 yen Tuesday in New York. Traders tend to buy the yen as a safe investment in times of turmoil or uncertainty.
The won was trading around 1,195.45 against the U.S. dollar, its weakest level in about three months. North Korea’s move could push the yen higher as nervous investors look for safety, said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank, adding “It’s mainly a problem for (market) sentiment.”
However, Yoshinori Shigemi, a global market strategist for JPMorgan Asset Management in Tokyo, said traders were concerned about “more serious issues” such as China’s slowing economic growth and fresh tensions in the Middle East.
“I think investors will start refocusing on those issues.” The euro fell to 127.51 yen from 128.00 yen in U.S. trade, while it edged down to US$1.0746 and from US$1.0750. Markets were already on edge over the increasing diplomatic row between Iran and Saudi Arabia that has fanned worries about the already volatile Middle East. In other trading, the British pound was near one-year lows at US$1.4667, while the U.S. dollar also jumped against emerging market currencies. The Malaysian ringgit slipped 0.82 percent against the greenback, while the Thai baht was down 0.24 percent and the Singapore dollar slipped 0.4 percent.