TOKYO (Reuters) – Asian stocks tracked Wall Street’s slide overnight to slip on Wednesday while the dollar was on the defensive with tensions in the Korean Peninsula showing little signs of abating.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.15 percent.

Japan’s Nikkei .N225 shed 0.55 percent and Australian stocks lost 0.3 percent.

South Korea’s KOSPI .KS11 was down 0.2 percent and on track for its fifth straight day of losses.

Geopolitical concerns continued to simmer following North Korea’s biggest-ever nuclear test on Sunday. Pyongyang is ready to send “more gift packages” to the United States, one of its top diplomats said on Tuesday.

Against such a backdrop U.S. stocks sank overnight, with the S&P 500 .SPX stumbling to its biggest single-day loss in about three weeks. [.N]

“Risks emanating from the Korean Peninsula have a broad impact particularly in East Asia, but after a few days the effects begin to fade in other regions, like those of emerging markets,” said Kota Hirayama, senior market economist at SMBC Nikko Securities.

Emerging markets are likely to shift their focus to the European Central Bank policy meeting and then the U.S. Federal Reserve’s Open Market Committee (FOMC) gathering, Hirayama said.

“The steady flow of foreign investor funds into emerging markets have shown signs of abating lately. Euro zone and U.S. monetary policies could prove crucial in dictating these flows.”

The dollar posted losses, notably against the Japanese yen and Swiss franc, reflecting the risk-averse mood in the broader markets.

The European Central Bank holds a policy meeting on Thursday and investors are keen to see whether it will send a message regarding the timing of an exit from its ultra-loose monetary policy.

Fed policy makers will gather on Sept. 19-20.

The greenback was down 0.2 percent at 108.630 yen JPY= after losing about 0.9 percent overnight, its biggest one-day drop in three months.

The Swiss franc was slightly higher at $0.9540 per dollar CHF= having gained more than 1 percent so far this week.

The dollar suffered further after Federal Reserve Governor Lael Brainard said on Tuesday inflation was “well short” of target, in the clearest signal yet the central bank is getting more dovish in the face of weak data.

The dollar index against a basket of six major currencies .DXY was little changed at 92.240 .DXY after losing 0.4 percent the previous day.

The euro was 0.1 percent higher at $1.1924 EUR= and on the way for its third straight day of gains, albeit modest ones, ahead of Thursday’s ECB policy meeting.

Government debt benefited from the risk-averse mood, with the 10-year U.S. Treasury yield US10YT=RR extending its sharp overnight slide and falling to a 10-month low of 2.054 percent.

In commodities, safe-haven gold hovered near one-year highs as the dollar eased and flight-to-safety demand remained robust thanks to geopolitical risks. [GOL/]

Spot gold XAU= was 0.2 percent higher at $1,341.31 an ounce after touching $1,344.21 overnight, its highest since September 2016.

Crude oil prices edged lower after the previous day’s rally ran its course. Crude surged on Tuesday as the gradual restart of refineries in the U.S. Gulf that were shut by Hurricane Harvey raised demand. [O/R]

U.S. crude futures CLc1 was down 0.15 percent at $48.58 a barrel after climbing 2.8 percent overnight.