Safe haven demand drove up gold and the yen while equities in Asia were pressured by elevated tensions on the Korean Peninsula early on Monday after North Korea said it tested a hydrogen bomb over the weekend.

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Japan's Nikkei 225 declined 0.44 percent in early trade.

Across the Korean Strait, the Kospi fell 0.88 percent. Blue chips across sectors sold off: Samsung Electronics tumbled 1.25 percent and Hyundai Motor was down 1.4 percent.

South Korean markets have retraced losses fairly quickly in the past following North Korean saber-rattling, but the benchmark index has taken slightly longer to recover after the latest provocations.

Down Under, the S&P/ASX 200 slid 0.32 percent, with declines seen across most sectors. The heavily-weighted financials sub-index was down 0.51 percent, but gold miners rose.

Malaysia and Vietnam markets are closed for public holidays.

Meanwhile, gold prices and the yen were supported by safe haven demand as markets in the region reacted to North Korea.

Against the Japanese currency, the dollar slid almost 0.4 percent to fetch 109.81 yen at 8:11 a.m. HK/SIN, after falling as low as 109.29 yen earlier in the session. That compared to Friday's close above the 110 handle.

The Swiss franc, also regarded as a safe haven currency during times of uncertainty, rose to trade at 0.9610 francs to the dollar from the 0.965 handle seen last Friday. The currency strengthened as high as 0.9585 francs to the dollar earlier in the session.

Meanwhile, spot gold surged to trade as high as USD 1,336.79 an ounce, up from levels around USD 1,324 seen in the last session. The yellow metal last traded at USD 1,336.35.

"After a risk positive overnight session on Friday, news on Sunday that North Korea successfully tested a more advanced nuclear weapon has this morning triggered a bid for safe haven currencies (Japanese yen and Swiss franc) while

North Korea claimed on Sunday that it had conducted a test of a hydrogen bomb meant to be carried by a long-range missile. The test — which the North called a "perfect success" — was estimated to have an explosive yield of up to 100 kilotons, news agency Yonhap reported a South Korean lawmaker as saying.

President Donald Trump called North Korea's latest test "hostile and dangerous." When asked about the possibility of a US military attack in response to the North's latest actions, Trump told a reporter, "We'll see."

Trump also suggested on Twitter that the US was considering "stopping all trade with any country doing business with North Korea" as a potential response. The move, if implemented, would likely affect China — North Korea's most important trading partner.

The Sunday test came on the back of heightened geopolitical tensions in the region. The North had launched a missile that flew over Japan just a few days prior.

Markets also continued to digest weaker-than-expected US employment data released on Friday. US nonfarm payrolls for August showed 156,000 jobs were created, below the 180,000 forecast by economist in a Reuters poll.

Despite the miss, equities in the US closed higher on Friday, with the Dow Jones industrial average rising 0.18 percent, or 39.46 points, to close at 21,987.56.

In corporate news, Malaysia's Petroliam Nasional Berhad, or Petronas, said on Saturday it was not interested in acquiring a majority stake in Daewoo Engineering & Construction, Reuters reported. South Korean media had reported that Petronas was interested in the deal on Friday. Daewoo shares were down 1.75 percent in early trade.

Other market movers in the session included surging Korean defense stocks. Shares of military systems maker Victek outperformed, jumping 18.56 percent in early trade. Gains in other defense players were more moderate: Hanwha Techwin was up 0.26 percent and Korea Aerospace rose 0.22 percent.

On the energy front, Brent crude futures declined 0.63 percent to trade at USD 52.42 a barrel. US West Texas Intermediate was flat at USD 47.29. Meanwhile, US gasoline futures extended losses made on Friday, falling 2.41 percent to trade at USD 1.7058 a gallon.

Meanwhile, the dollar index, which tracks the greenback against a basket of six major currencies, stood at 92.650 at 8:28 a.m. HK/SIN.

The economic calendar for Monday is fairly light, with the only notable data release being Indonesia August CPI due at 12:00 p.m. HK/SIN.

US markets will be closed Monday for Labor Day.

First Published:Sept 4, 2017 7:28 AM IST