By Wayne Cole
SYDNEY (Reuters) - Investors ducked for cover on Wednesday as a drumbeat of alarming geopolitical news sent the safe-haven yen and gold to five-month highs and yields on top-rated sovereign bonds to their lowest for the year so far.
The unease tarnished an otherwise brightening outlook for global economic growth and put equities on the defensive.
Japan's Nikkei <.N225> slid 1 percent in early trade, while MSCI's broadest index of Asia-Pacific shares outside Japan was near flat.
In contrast, gold climbed to $1,275.66 an ounce and touched its highest since Nov. 10.
"A degree of uncertainty has found its way into previously seemingly bulletproof financial markets," wrote analysts at ANZ.
"There is clearly some nervousness out there, with tensions around North Korea ratcheting higher and adding to an already heightened geopolitical environment. Global cyclical assets have not yet responded, but that can't last."
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North Korea warned on Tuesday of a nuclear attack on the United States at any sign of aggression, as a U.S. Navy strike group steamed towards the western Pacific - a force President Donald Trump described as an "armada".
Trump said in a Tweet that North Korea was "looking for trouble" and the U.S. would "solve the problem" with or without China's help.
The bellicose language has dragged South Korean stocks and the won to four-week lows and caused jitters right across Asia.
At the same time, U.S. Secretary of State Rex Tillerson was in Moscow to denounce Russian support for Syria's Bashar al-Assad, raising the stakes in the Middle East.
A joint press conference by Trump and NATO Secretary General Jens Stoltenberg is also likely to generate headlines.
A YEN FOR YEN
The yen, a favoured harbour in times of stress due to Japan's position as the world's largest creditor nation, climbed across the board.
The dollar was nursing a grudge at 109.62 yen , having been as low as 109.53 at one stage. Dealers warned there was little in the way of chart support until the 200-day moving average at 108.72.
The euro sank to its lowest in five months at 116.16 yen having fallen 11 sessions in a row, a record for the single currency. It was steadier on the dollar at $1.0610 .
Political uncertainty in France added to the euro's woes as hard-left candidate Jean-Luc Melenchon surged in the polls ahead of the May Presidential election.
All this unease boosted bonds with yields on 10-year Treasuries boasting their lowest close of the year on Tuesday. Yields were last at 2.296 percent and testing a hugely important barrier on the charts.
Wall Street's losses were relatively minor so far as investors wagered on an upbeat earnings season, which kicks off this week with a handful of banks.
The Dow eased 0.03 percent, while the S&P 500 lost 0.14 percent and the Nasdaq 0.24 percent.
Analysts expect earnings for all S&P 500 companies to have risen 10 percent in the first quarter from a year ago, according to Thomson Reuters data.
Oil got an added lift from reports that Saudi Arabia told OPEC officials it wants to continue OPEC cuts for an additional six months.
Global benchmark Brent edged up 13 cents in early trade to $56.36 a barrel, while U.S. crude added 12 cents to $53.52.
(Editing by Shri Navaratnam)