The Korean stock index at the Korea Exchange in Seoul. Photo: AFP/Jung Yeon-je

Chinese large-cap stocks soared overnight, with Dongfeng Motor leading the HSCEI up with a 4.3% gain, and major banks and insurers up around 2%. The Korean stock market rose about 0.7%.

Asia Unhedged thinks that it’s time to buy Asian stocks again: Actually, the time to buy Asian stocks again was Friday. From an investment standpoint the crisis is a comic operetta. There isn’t now and never was a military option for the United States. However crazy Kim Jong-un might be, he took the measure of the world’s greatest superpower with craft and precision.

By any standard China is the big winner. The United States is beholden to Beijing for voting for sanctions at the UN Security Council on August 6 and for imposing additional sanctions on the North Korean regime since then. Beijing holds chips that it can cash in at a number of counters, for example in the question of American pressure to reduce the US$350 billion trade deficit with Beijing.

Washington has nothing to do but walk back the president’s “fire and fury” rhetoric of last week. So there’s nothing not to like about Asian equity markets.