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.
Mourinho impressed by Lukaku & Matic despite mistakes in Real Madrid loss
Matic was frustrated with the result but has called on United to turn their full focus to Sunday's league opener against West Ham.
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.
Fomer Phillie Ryan Howard signs minor-league deal with Rockies
He'd been slumping badly for a couple years, and one point, a Phillies columnist begged him to hang up the cleats for good . Throughout his career, Howard has blasted 382 home runs and drove in 1,194 runs at the major league level.
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.
Canadian Apartment Properties REIT Plans Monthly Dividend of $0.11 (CAR)
ValuEngine downgraded Avis Budget Group from a "strong-buy" rating to a "buy" rating in a research note on Tuesday, May 23rd. As of the end of the quarter Proficio Capital Partners LLC had acquired a total of 156 shares growing its stake by 1,733.3%.