US stock futures and Asian share markets have tumbled, while the yen jumped to four-month highs against the dollar, after North Korea fired a missile over northern Japan.
S&P mini futures fell as much as 0.85 per cent before recovering losses to trade 0.5 per cent below its close on Monday.
Japan's Nikkei fell 0.7 per cent to four-month low, while South Korea's Kospi shed 0.5 per cent, helping to drag down MSCI's broadest index of Asia-Pacific shares outside Japan 0.3 per cent.
North Korea fired a missile early over Japan into the Pacific waters off the northern region of Hokkaido earlier on Tuesday.
The yen rose 0.8 percent to 108.33 to the US dollar, its highest since April, despite Japan's proximity to North Korea.
The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation, and there is an assumption that Japanese investors will repatriate funds should a crisis materialise.
The safe-haven Swiss franc also advanced 0.5 per cent to 0.9510 franc on the dollar, its highest level in about a month and rose 0.6 per cent to 1.1385 per euro.
Gold also jumped 0.9 percent to $US1324 per ounce, hitting its highest level since November 9.
Investors also rushed to the safety of US Treasuries, pushing down the 10-year yield to a two-month low of 2.124 per cent.
On Monday, US shares were narrowly mixed as investors tried to assess the damage caused by Tropical Storm Harvey.
US gasoline priced surged as much as seven per cent to a peak of $US1.7799 per gallon on Monday, the highest since late July 2015. It last stood at $US1.7317 in early Tuesday trade.
Going in the opposite direction, US Crude oil prices hit one-month lows on Monday, on worries refinery shutdowns due to the flooding could boost inventory.
US crude futures stood at $US46.79 per barrel in early Tuesday trade, up 0.5 per cent on the day, after having fallen to as low as $US46.15 on Monday.
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