The broader Topix fell 1.1 percent to 1,617.90 and the JPX-Nikkei Index 400 shed 1.0 percent to 14,375.72.
North Korea does have the habit of shooting off its mouth but this time, the threats seem to be much more serious and that is why the world leaders are taking it a bit more seriously this time and that is also the reason why we are seeing the stock markets correct and the gold prices shoot up.
USA stock futures were pointing to a weaker open on Wednesday.
The single currency slipped 0.3 percent to $1.1723 and was holding just above a July 28 low of $1.1688.
Trump further ratcheted up the rhetoric in remarks this afternoon, suggesting that his "fire and fury" comments may not have been tough enough. That prompted North Korea to say it was considering firing missiles at Guam, a US -held Pacific island.
The 30-year bond last rose 5/32 in price to yield 2.8107 percent, from 2.818 percent late on Wednesday.
Technology companies led a broad slide in USA stocks late Thursday afternoon, putting the market on track for its biggest loss in two months.
Investors flocked to gold Wednesday against the backdrop of rising tensions between the USA and North Korea, offsetting some of the broad-based declines on the commodity-heavy Toronto stock index.
He said: "While the two monetary metals continue to trade mostly on real yield dynamics, some investors reacted to the escalating tension by buying these traditional safe-haven instruments". In 3.08pm trading, the Standard & Poor's 500 Index fell 1 percent.
"Uncertainty over geopolitical tensions on the Korean peninsula hit when market was already sluggish on a seasonal slowdown in activity in the summer", said Mutsumi Kagawa, chief global strategist at Rakuten Securities. The Dow Jones industrial average slid 36.64 points, or 0.2 percent, to 22,048.70. The Russell 2000 index gave up 1.7 percent to 1,372.54. The September copper contract was down two cents to US$2.91 a pound.
The index fell to 2,321.04 at one point, the lowest since May 24.
The dollar weakened after news that US producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.
He said:"Financial markets are already taking precautions against an escalation with haven buying happening in the Swiss franc, gold and the Japanese yen, though why anyone would want to buy a currency which is on the front line of a possible conflict is beyond me".