Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific territory of Guam.
Wall Street saw a stock sell-off on Thursday as rising tensions between the USA and North Korea filled investors with worry.
Stock market losses slowly deepened throughout the day.
The index had its biggest drop since mid-May a day earlier.
Australian shares were down 1.3 per cent, set for a weekly loss of 0.6 percent and Chinese and Hong Kong bluechips lost 1.6 per cent and 1.9 per cent, respectively. Both slid to more than one-month lows.
Trump took specific aim at North Korean leader Kim Jong Un, saying, he had "disrespected our country greatly", and would not be "getting away with it". However, if the situation becomes more than a war of words or if North Korea becomes more successful with its missile launches, that would change the situation immediately. A war with North Korea, likely spilling over into relations with China and Russian Federation, probably qualifies.
"I think the market would put it as a very low probability that this turns into anything extremely meaningful", said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute. The Japanese currency is often a safe have asset too.
U.S. Treasury yields fell to as low as 2.197 percent, their lowest level since June 28 overnight.
On the currency markets, the pound was down to a three-week low against the U.S. dollar but mainly due to earlier disappointing output and trade data.
"It's a clear case of "risk-off" sentiment lifting the yen, as investors focus on the latest developments with North Korea", said Kumiko Ishikawa, FX market analyst at Sony Financial Holdings in Tokyo.
Trading was thinner than usual, with Japanese markets closed for a public holiday.
United States equities had been on track for a 10th-straight record session Tuesday and the dollar was initially up after the JOLTS survey showed job openings hit a record in the USA last month.
"Ahead of the US inflation numbers gold will likely trade sideways until there's more direction", said Fawad Razaqzada, an analyst at FOREX.com.
Stocks going ex-dividend included BT, Royal Dutch Shell, BP, Lloyds, and pharma companies GSK and AstraZeneca, taking around 41 points off the index.
Materials, a sector that includes gold producers and other resource-based companies, was the lone gainer among the index's 10 main sectors, rising 0.7 percent.
Oil prices edged higher after a report showed USA refineries processed record amounts of crude in the latest week, eating into inventories, although a surprise jump in gasoline stockpiles limited gains.
Elsewhere in commodities, the September crude contract advanced 20 cents to US$49.76 per barrel and the September natural gas contract was up seven cents to US$2.95 per mmBTU.