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Officials in both the US and China were no doubt hoping this week’s meeting between President Donald Trump and his Chinese counterpart Xi Jinping was going to take place under ideal circumstances, without any distractions. North Korea’s government appears to have had other ideas.

North Korea fired a projectile into the Sea of Japan on Wednesday morning, according to official media.

“North Korea fired a projectile into the East Sea from a site in the vicinity of Sinpo, South Hamgeyong Province, this morning”, South Korea’s official Yonhap News Agency quoted the South Korean Joint Chiefs of Staff as saying.

In March, North Korea fired four ballistic missiles into the Sea of Japan in a demonstration of the continued advancement of its weapons programme. That has helped ratchet up tensions in the region still further and placed the US-developed missile defence system, recently deployed by Seoul, at the centre of a dispute in which backlash from China has hurt South Korean business interests – including, most recently, its automakers.

South Korea and US officials have said that the anti-missile defence system is needed to thwart a growing threat from North Korea, but China claims the system’s radar penetrates far into its territory.

On Wall street the S&P 500 steadied on Tuesday as energy stocks got a lift from a rally in oil prices, while the 10-year Treasury yield bounced off a five-week low. The South African finished the session down 0.5 per cent, and was edging down another 0.2 per cent in early Asia trading on Wednesday.

In Asia Pacific equities, futures tip Sydney’s S&P/ASX 200 index to rise 0.5 per cent at the open, while in Tokyo the Topix is expected to climb 0.7 per cent and the Hang Seng in Hong Kong is set to dip 0.1 per cent when trading starts.

No major corporate earnings reports are scheduled for Wednesday, but the economic calendar has a few items on the docket (all times Hong Kong):

  • 08.30: Taiwan Nikkei manufacturing PMI
  • 08.30: Japan Nikkei composite, services PMIs
  • 09.00: Philippines consumer price inflation
  • 12.00: Malaysia imports, exports and trade balance
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