North Korea missile and strong euro sink European stocks

World stocks tumbled and safe-haven assets soared on Tuesday after North Korea fired a missile over northern Japan, fuelling worries of fresh tension between Washington and Pyongyang.

The risk-off move spread from Asia to Europe and a rally in the euro to above a key level chipped in to put regional stocks on track at one point for their biggest one-day loss in 11 months.

The pan-European STOXX index fell as much as 1.7 percent to their lowest in six months before paring losses to trade down 1.3 percent, while Wall Street futures pointed to sharp losses at the open.

Japan’s Nikkei .N225 hit a four-month low before paring losses to end 0.5 percent down and South Korea’s Kospi <.KS11 shed as much as 1.6 percent before ending down 0.2 percent.

The MSCI World Index .MIWO00000PUS, which tracks stocks from developed economies, fell just 0.1 and remained above a five-week low hit earlier his month on jitters over North Korea, growing turmoil at the White House and a deadly attack in Spain.

North Korea fired a missile on Tuesday that flew over Japan and landed in the Pacific about 1,180 km (735 miles) off the northern region of Hokkaido in a sharp escalation of tensions on the Korean peninsula.

The Asian country has conducted dozens of ballistic missile tests under young leader Kim Jong-Un, but firing projectiles over mainland Japan is his first.

The unprecedented move raised worries that the crisis could further mount, sparking a rush into safe haven assets from the Japanese yen to the Swiss franc and the German bund.

The dollar hit its lowest level since mid-April against the yen and was last down 0.7 percent at 108.55 JPY=.

The Japanese currency tends to benefit during times of geopolitical or financial stress because Japan is the world’s biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize.

Also the safe-haven Swiss franc strengthened, while gold XAU=, up 0.8 percent to $1,320 an ounce, hit its highest level in more than nine months after three straight days of gains.

The metal also drew support from uncertainty surrounding the Trump administration after remarks last week raised fears of a government shutdown.

Investors also rushed to the safety of U.S. Treasuries, briefly pushing down the 10-year yield US10YT=RR to its lowest since mid-November, while the yield on Germany’s 10-year government bond DE10YT=TWEB fell to 0.336 percent, the lowest since end June.