The broader All Ordinaries index was down 67.1 points, or 1.15 per cent, at 5,743.5 points. Were the situation to escalate, much more than the stock markets would be at risk.
Shaun Osborn from Scotiabank said, "The yen is the big story really".
"What has changed this time is that the scary threats and war of words between the USA and North Korea have intensified to the point that markets can't ignore it", said Shane Oliver, head of investment strategy at AMP Capital in Sydney. The Dow Jones industrial average slid 204.69 points, or 0.9 percent, to 21,844.01, just shy of its low point for the day.
J.C. Penney (JCP.N) finished down 16.6 percent after hitting a record low following the retailer's bigger-than-expected quarterly loss.
The Standard & Poor's 500 index fell 5.99 points, or 0.2 percent, to 2,474.92.
Manchester City clear favourites for Premier League title
But there were too many draws. " At the end of the game the boys were disappointed that we didn't win ". Leaping from sixth place to top may appear ambitious but United are precisely that.
The tech-heavy Nasdaq composite bore the brunt of the sell-off, losing 135.46 points, or 2.1 percent, to 6,216.87.
The report said labor productivity climbed by 0.9 percent in the second quarter after inching up by a revised 0.1 percent in the first quarter.
Gold-related stocks were well-supported with Newcrest Mining up 2.1 per cent at $21.85 and Evolution Mining up 2.2 per cent to $2.34.
Oil prices closed lower after an early rally faded.
ENERGY: Benchmark U.S. crude added 28 cents to $49.45 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price worldwide oils, added 26 cents to $52.96. Wholesale gasoline dropped 2 cents to $1.60 a gallon, while heating oil shed 2 cents to $1.63 a gallon.
The euro, which hit its highest since the start of 2015 on August 2, dipped 0.1 percent to $1.1761 in morning trade in Europe.
Jose Mourinho insists Manchester United's transfer activity is sufficient
The Portuguese coach concedes his squad is "similar" to the one he took charge of last season . What we had was midfielders, wingers, scoring, central defenders scoring goals at set pieces.
REA Group shares fell $4.07 cents, or almost six per cent, to $64.35 after its full-year net profit slipped 19 per cent to $206.3 million.
Disappointing economic data releases weighed on both sides of the Atlantic today with a negative goods trade balance for the United Kingdom (-0.1% versus expectations of 1.4%), higher unemployment claims from the USA (244,000) and also a negative month-on-month PPI figure for the U.S. (-0.1%).
Looking at the yen, overnight trading was fairly subdued with a 109.89/110.16 range taking hold. Tokyo's Nikkei 225 tumbled 1.3 percent to 19,738.71 while Seoul's Kospi fell 1.1 percent to 2,368.39.
In Europe, Germany's DAX fell 1.1 percent, while the CAC 40 in France lost 0.6 percent.
But the S&P Bank sub-sector.SPXBK fell 0.7 percent on dimming prospects of another rate hike this year since higher rates tend to boost bank profits. The 1.3 percent gain for the market's main other choice for borrowing to fund speculation, the Swiss franc against the euro, is its biggest rise in more than a year.
Rod Pampling Hit the Greatest Shot in Major Championship History
The Ohio-based Queenslander has only managed top-30 results at the Masters and British Opens and he missed the cut at the US Open. And we were walking up, and we were talking about like if we can get a tee shot on 18 we could finish the round.