North Korea has since threatened to launch missiles at the US territory of Guam, and the country previously threatened "all-out war, wiping out all the strongholds of enemies, including the USA mainland".
CURRENCIES: The euro was down 0.1 percent at $1.175 while the dollar fell 0.6 percent to 109.68 yen.
Trump said that Kim-un Jong had disrespected his country and also said that he would not be getting away with it.
Tension between the two countries usually heightens around this time of the year as the United States conducts a series of military exercises jointly with South Korea, which the North views as direct intimidation - but nothing as bellicose as this.
According to reports, North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam. Asian equities this morning largely halted a dramatic sell-off sparked by spiralling bellicosity over North Korea, as tentative calm returned to markets following reassuring words from the US Secretary of State.
'Traders are on red alert as the mention of war has sent them running for cover. But Michael said the overall market was still expected to saw-tooth its way higher due in part to a batch of better-than-expected earnings and low interest rates, despite the shift toward raising rates.
Trump issued a new warning to Pyongyang on Friday, saying in a tweet: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely". Chinese blue chips closed flat but Hong Kong's Hang Seng index was last down 0.2 per cent.
Dow Jones Industrial Average (DJIA) futures are trading below fair value, as the tensions between the USA and North Korea amplify.
"The market is trying to interpret the CPI data as somewhat positive because it is anticipating that the Fed will be on hold not only in September but also possibly in December", said Robert Pavlik, chief market strategist at Boston Private Wealth.
USA stock futures were pointing to a weaker open on Friday. 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, France's CAC 40 fell 1.6 percent to 5,135 while Germany's DAX was down 1.3 percent at 12,133.
US stocks recovered temporarily late on Wednesday as investors appeared to brush off the geopolitical concerns following encouraging comments from Secretary of State Rex Tillerson. Major European markets sank in early trade Thursday after the Dow recorded its second straight negative close Wednesday, although the dollar firmed against the pound and euro ahead of USA inflation data Friday.
Earlier, the dollar slipped as low as 108.91 yen, its weakest level since June 14, when the greenback fell as low as 108.81 yen. Discovery Communications fell 94 cents, or 3.9 percent, to $23.36.
The yield on USA 10-year Treasurys slid to 2.199% Friday from 2.211% Thursday.
Gold rose 0.6% to $1,268 (£976) an ounce and platinum gained 0.6% to reach $972.95 an ounce, having hit its highest since April at $979.
USA crude shed 20 cents to $48.97 a barrel, while Brent crude fell 26 cents to $51.88 a barrel.