Korean Update-Or-At Least Someone's Making Money..

Dollar Rises Against Euro on Prospect U.S. Payrolls Expanded

North Korea may attack the province that surrounds Seoul, the Tokyo Shimbun newspaper said, citing an unidentified person who quoted an official in the communist nation. South Korea will hold artillery drills on Yeonpyeong, the island shelled by the North last week, on Dec. 6, television broadcaster MBN reported today, citing government officials it didn’t identify.

Japan and the U.S. will conduct a joint military exercise from tomorrow until Dec. 10.

“Geopolitical risk appears to be returning a bit on worries that North Korea may attack the South,” said Satoshi Okagawa, head of the foreign-exchange and money trading group in Singapore at Sumitomo Mitsui Banking Corp., a unit of Japan’s third-largest banking group. “There’s some safe-haven buying of the yen and the dollar.”

And:

The won strengthened for a third day as funds based abroad bought $373 million more Korean shares than they sold yesterday, the biggest net purchases in almost three weeks, exchange data show. The Kospi index of shares posted its highest close since Nov. 10 on optimism that tensions between North and South Korea are easing.

“We haven’t seen North Korean retaliation, which they pledged to do after the attack, and the lack of negative events let risk aversion subside,” said Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong. “Positive sentiment globally boosted appetite for risk assets like the Korean won.”

US, Japan begin war games; China denounces drills

In an ongoing show of force following a deadly North Korean attack on a front-line island, the U.S. and Japan began one of their biggest-ever military exercises Friday, mobilizing more than 44,000 troops, hundreds of aircraft and a U.S. supercarrier.

The drills come just after the U.S. and South Korea concluded maneuvers in the Yellow Sea. The exercises brought immediate criticism from China, which is wary of having foreign navies off its shores and has been increasingly assertive over large swaths of waters in the south and east China seas, where some of the drills would take place.
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The Nov. 23 North Korean attack killed two South Korean marines and two civilians on Yeonpyeong Island, a tiny enclave of civilians and military bases located near a disputed maritime border.

The attack has heightened tensions in the region and renewed fears of a bigger clash breaking out that could draw in neighboring countries, including Japan, where about 50,000 U.S. troops are based under a security pact.

South Korea’s New Defense Chief Threatens Air Strikes on North

South Korea’s new defense minister vowed retaliation that would include airstrikes if North Korea makes another attack following last month’s deadly artillery bombardment.

“I will mobilize all combat capabilities available to severely punish the enemy,” Kim Kwan Jin, former chairman of the Joint Chiefs of Staff, said today at a confirmation hearing. “I will surely use planes. This is a matter of self-defense.”

This may be a sign that the crisis is cooling a bit..

“The latest tough talk seemed to be mostly aimed at deterring North Korea from further provocations,” said Kim Yong Hyun, a professor of North Korean studies at Dongguk University in Seoul. “There is only so much South Korea can do in terms of tough actions when there’s little assurance of how far North Korea will go.”

Or maybe cooling not so much..

A news report says North Korea now has more multiple-launch rockets capable of hitting Seoul.

Yonhap news agency says North Korea has increased its arsenal of rockets by 100 pieces to about 5,200. Yonhap cited an unidentified South Korean military source.

The agency says the rockets have a range of 37 miles (60 kilometers), putting Seoul within striking distance.