Kim Jong Un sent a ballistic missile over Japanese airpsace first thing this morning escalating North Korean tensions. Its a violation of Japanese sovereignty and a serious offense ! His message cant be clearer… that he cant be ignored ! The US has been eerily quiet with the new developments. Is the time for talking and headlines over? Trump doesnt disclose military plans before striking…why ruin the surprise ! Markets are certainly worried with risk off trading dominating the Asian open. S+P gaped lower 0.7% on the reopen and safe haven flows pushed gold up 0.8% to trade as high as $1324. These flows have also punished USDYEN taking it to test the low for the year down at 108.12. Its a critical level as support gaps away below here. The monthly chart below shows the first meaningful support comes in at the 200 MMA at 106.00. Below that the psychological 105.00 level will draw like a magnet. Risk off trading brings the risk crosses into play…. selling AUDYEN, NZDYEN and CADYEN. The market is positioned long at extreme levels for the risk currencies so if risk off trading gets traction and especially if S+P breaks support at 2400/10 region then expect both legs of the risk crosses to work well . CADYEN may be the pick of the bunch as its still at very elevated levels and a break of 85.50 should see a nasty spike lower. Crude overnight was down 2% and looking like breaking down again which should put added pressure on CAD.