The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialise.
"Traders should closely watch global equities today, with further falls and risk aversion likely pumping more safe-haven flows into precious metals", said Jeffrey Halley, a senior market analyst at OANDA.
Overnight, Wall Street closed sharply lower after Trump, with fiery rhetoric, warned Pyongyang against attacking Guam or US allies after it disclosed plans to fire missiles over Japan to land near the US Pacific territory.
The Dow Jones Industrial Average .DJI fell 204.69 points, or 0.93 percent, to close at 21,844.01, the S&P 500 .SPX lost 35.81 points, or 1.45 percent, to 2,438.21 and the Nasdaq Composite .IXIC dropped 135.46 points, or 2.13 percent, to 6,216.87.
Secretary of State Rex Tillerson later insisted the US isn't signalling it's about to mete out a military response despite threats from North Korea suggesting it could attack Guam, a USA island territory in the Pacific. Hong Kong's Hang Seng Index slipped 0.47% while mainland markets traded marginally higher.
Gold prices dipped lower in US trading on Tuesday following the latest US job-openings data which increased confidence in the labour market and also triggered sharp dollar gains as EUR/USD declined to 10-day lows below 1.1720.
The S&P is trading near its most expensive valuation level since 2004, as measured by the price-to-12-month forward earnings ratio.
This is a record and the market has never been more bearish on volatility or calm about the near-term outlook for USA equities.
"The escalation of the geopolitical situation between the USA and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial.
The remarks followed a new report asserting that USA intelligence has assessed that Pyongyang has successfully produced a nuclear warhead that can fit inside its missiles. By 2.50pm, it was trading down 0.1%.
Both hit more than one-month lows.
The dollar eased slightly against a basket of major currencies.
The dollar index .DXY , which tracks the greenback against six rival currencies, was down 0.12 percent to 93.53, after rising as high as 93.888 earlier in the session.
Helping offset the geopolitical tensions was weaker-than-expected consumer price data for July, pointing to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year.
Global benchmark Brent lost 0.7 percent to $51.53, after Thursday's 1.5 percent drop. Dollar" and there is the "U.S. They have soared over 2 percent in the previous two sessions, and are set for a weekly gain of 2.26 percent.
In commodities trading, U.S. crude oil was wallowing around $49 to the barrel amid speculation that a predicted gain in American output will offset OPEC-led efforts to trim a global glut. It is poised to end the week down 1.7 percent.