Tokyo — Financial markets have not really reacted much to the escalation in tension between the US and North Korea, and some observers explain that it is largely because in the worst-case scenario it is impossible to guess the appropriate price for things such as stocks and bonds.

"It’s hard to price a potentially extinction event (at least for much of the Korean peninsula)," is how Timothy Ash, a senior strategist at Bluebay Asset Management in London, puts it.

It is a point also made by Mark Mobius, the Templeton Emerging Markets Group executive chairperson and apostle for emerging-market investing. He said in a May interview about the prospect of a North Korean nuclear conflict that "there’s nothing you can do about it — if something breaks out, we’re all finished anyway".

Maybe that is why the worst day this year for the Kospi index of South Korean stocks was July 28, which was all about a global tech-stock retreat and nothing to do with geopolitics.


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