Trading was thinner than usual, with Japanese markets closed for a public holiday. The September copper contract was down two cents to $2.91 a pound.
The yen is perceived as a safe haven because Japan is the world's biggest creditor country and investors there have tended to repatriate funds in times of crisis. Shanghai's main index also tumbled 1.6 percent to 3,208.54 while Australia's S&P/ASX 200 dropped 1.2 percent to 5,693.10.
Emerging market stocks lost 1.28 percent.
The dollar index, which tracks the greenback against six rival currencies, edged higher after Dudley's comments and was up 0.03% to 93.577. It would be ideal for the precious metals if the dollar were to weaken again now, and that could happen courtesy if USA economic data is weaker.
"The overnight price action provides a good guide for a likely trading pattern in the case of further escalation - being long an equally-weighted basket of yen and franc vs short won should do well under such circumstances", said Chris Turner, head of foreign exchange strategy at ING.
South Koreans watch a television displaying news broadcasts reporting on North Korea at a station in Seoul today.
S&P 500 e-mini futures were down 0.2 percent, while the dollar dipped 0.2 percent against its perceived safe-haven Japanese counterpart to 110.12 yen.
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United States stock index futures fell, with the S&P 500 indicated to open down 0.4pc after share prices fell in Europe and Asia.
Baker Avenue's Lip said the US market was higher due to "bargain hunters", but "there's more room for the market to come down". The annual rate stood at 1.8%, which was below the 1.9% observed last month and the forecast of 2.1%.
Inflation has risen 1.7 percent over the past 12 months, suggesting that inflation pressures remain well under control.
The 30-year bond last rose 5/32 in price to yield 2.8107 per cent, from 2.818 per cent late on Wednesday.
December gold rose United States dollars 3.90, or 0.3 per cent, to settle at USD 1,294 an ounce.
The yen held steady against the dollar, taking a breather after having risen on Wednesday to its highest level in almost eight weeks.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in U.S. crude inventories, leaving prices volatile.
The Dow slid as declines in Apple and Goldman Sachs, down 2.3% and 1.7% respectively, outweighed gains in McDonald's and Coca-Cola, up 1.4% and 0.5% respectively.