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Nikkei Snaps Win Streak As North Korea Threatens To ‘Sink’ Japan With ‘The Nuclear Bomb Of Juche’

 “A telling blow should be dealt to them who have not yet come to senses after the launch of our ICBM over the Japanese archipelago."

Japan is no longer needed to exist near us. The four islands of the archipelago should be sunken into the sea by the nuclear bomb of Juche.

That’s from North Korea and it underscores two important points:

  1. this ain’t over
  2. Donald Trump is going to have to do a lot better than “fire and fury” if he wants to take the hyperbole crown from Kim

And that wasn’t the only thing the North said about Japan on Thursday. “A telling blow should be dealt to them who have not yet come to senses after the launch of our ICBM over the Japanese archipelago,” today’s statement goes on to warn.

You’re reminded that one of the reasons USDJPY rallied to its highest level in four weeks on Wednesday is that everyone assumed there would be no more missiles flying over Japan for the foreseeable future. Here’s a quick visual reminder of what happened late last month:

-1x-1

The fact that the USDJPY rally was in part attributable to North Korea not firing any missiles last weekend meant the move in the pair was good for Japanese equities on two fronts: the weaker yen was supportive as usual and because the risk-on move telegraphed by a stronger USDJPY was in this case directly related to the perception that the threat to Japan had dissipated, there was a little extra juice on the Japanese equity rally.

Well, with Thursday’s statement, Pyongyang is serving notice that any relief might have been fleeting. Here’s a chart that shows the jitters creeping back in and do try to appreciate how truly absurd the headline is (what you see below is the actual Bloomberg headline):

North

The Nikkei reversed course at exactly the same time:

Nikkei

And so, Japanese equities snapped a three-day win streak.

To be sure, poor data out of China didn’t help and folks are nervously eying this morning’s U.S. CPI print, but the main drag overnight in Japan seems to have been Kim and on that note, we’ll leave you with one last quote from the North:

Now is the time to annihilate the U.S. imperialist aggressors. Let’s vent our spite with mobilization of all retaliation means which have been prepared till now.

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2 comments on “Nikkei Snaps Win Streak As North Korea Threatens To ‘Sink’ Japan With ‘The Nuclear Bomb Of Juche’

  1. Krazy Kim has already figured out that barking at Japan is almost as good…if not better..than threatening to smoke Seoul. What a kid!! He really has this game down. He’s figured out that the US is tethered to 2 allies that are really easy targets and largely indefensible by conventional means.

    There’s no love lost between No. Koreans and Japanese…sell Japan a short range nuclear arsenal..we can publicize it as SHOGUN 1…with SHOGUN 2 to follow in 5 years. Japan can then, with impunity, tell Crazy Kim to do what he likes with So. Korea…that’s just one less electronics competitor for the Rising Sun. Fly one more missile over our airspace, however, and we vaporize you and China can then take over the rock pile posing as a nation state and install a more compliant guy.

    • GREG: I like everything thing you said there with only one exception. The word nuclear. Simply a short range arsenal (with some added emphasis) would deliver the intended message. I especially like the vision of a “rock pile posing as a nation” … that was great!

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