North Korea moves missiles, South Korean markets roiled

Reuters: North Korea has placed two of its intermediate range missiles on mobile launchers and hidden them on the east coast of the country in a move that could threaten Japan or U.S. Pacific bases, South Korean media reported on Friday.

The report could not be confirmed. But any such movement may be intended to demonstrate that the North, angry about joint U.S.-South Korean military exercises and the imposition of U.N. sanctions, is prepared to demonstrate its ability to mount an attack.

The North has said nuclear conflict could break out at any time on the Korean peninsula in a month-long war of words that has prompted the United States to move military assets into the region.

The tension with North Korea has roiled South Korean financial markets and top finance officials in Seoul warned they could have a long-term impact on markets.

In North Korea itself, there was no intensification of the strident rhetoric about impending war as the country marked a national holiday. And some analysts said the tone of recent statements, however bitter, was most probably aimed at securing concessions and was unlikely to lead to armed conflict.

South Korea’s Yonhap news agency, quoting a senior military official familiar with the matter said: “Early this week, the North moved two Musudan missiles on the train and placed them on mobile launchers.”

There were unconfirmed media reports on Thursday that the North had moved missiles to the east coast, although it was not clear what kind of missiles had been deployed.

South Korea’s Defence Ministry declined to comment.

Speculation centred on two kinds of missiles neither of which is known to have been tested.

One was the so-called Musudan missile which South Korea’s Defence Ministry estimates has a range of up to 3,000 km (1,865 miles, the other is called the KN-08, which is believed to be an inter-continental ballistic missile, which is again untested. In Seoul, officials from economic ministries, the central bank and regulatory agencies held emergency talks and promised swift and strong action should the markets lose stability. News of the talks and the central bank involvement boosted investors’ expectations of an interest rate cut next week.

South Korean shares slid, with foreign investors selling their biggest daily amount in nearly 20 months, hurt after aggressive easing from the Bank of Japan sent the yen reeling, as well as by the tension over North Korea.