North Korea Seen Moving ICBM Into Position For Possible Launch: Report

The USDJPY and 10Y yields snapped lower and gold kneejerked higher following the latest North Korea-related headline out of Bloomberg, according to which:

• NKOREA STARTS MOVING ICBM FOR POSSIBLE LAUNCH BEFORE SAT.:DAILY

Bloomberg references a just released article in the Asia Business Daily, according to which North Korea started moving the ICBM-class missile, produced at a new Pyongyang research center, on Monday following Sunday"s thermonuclear test.

The report confirms overnight intelligence from South Korea: recall first thing this morning, Yonhap reported that South Korea"s spy agency said it had detected that North Korea is making preparations for a possible intercontinental ballistic missile launch, a move that would further raise tensions a day after it conducted its sixth and most powerful nuclear detonation.

Chang Kyung-soo, acting chief of the defense ministry’s policy planning office, told lawmakers on Monday that North Korea was making preparations for a missile firing, according to Bloomberg while Yonhap adds that South Korea"s spy agency said there was a chance the North could fire an ICBM into the Pacific Ocean, saying that the isolated state was able to conduct a nuclear test at any time.

According to the just released Business Daily report, there is high chance N. Korea will fire ICBM missile before Sept. 9 national founding day. More details from the original report, Google translated:

According to the authorities, one ballistic missile produced by a weapons research institute dedicated to the production of North Korea"s ICBM was found to be moving to the west of Hwanghae Island after being mounted on the 4th Mobile Launch Base (TEL) on the day after the 6th nuclear test.

...

Earlier this year, North Korea built a 1980-square-meter weapons lab, which could manufacture ICBMs, in Pyongyang. It was last February that the weapon laboratory was released to the outside world. Although it was a wilderness until 2009, it has now been transformed into a strategic hub for North Korea"s major missiles.

...

According to a joint US-ROK report, North Korea has a maximum of 900 ballistic missiles, and it has been confirmed that there are 108 aircraft capable of launching surprise attacks. According to ballistic missiles, the number of Scud missiles and TEL that can mount Scud missiles are the most common. The number of Scud missiles is 430 (TEL 36).

The report concludes by noting that according to S. Korean intel, "if North Korea conducts further ICBM provocations there is a high possibility that it will choose an unpredictable time and place. To this end, Pyongyang may launch missiles directly from the mobile launch base, or launch multiple missiles at multiple locations simultaneously."

The report also notes that the ICBM mobile launcher is moving "at low speed mainly during the night time" to avoid detection by foreign intelligence authorities. In other words, the US now has a conveniently moving target and a due date by which North Korea will likely launch its next rocket, effectively giving Trump a greenlight for a "preemptive" strike over the next five days.

The market"s reaction to the news, while not as dramatic as to Sunday"s nuclear test, confirms just how much on edge traders remain for every headline out of North Korea.

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North Korea Shows Off New ICBM, Sub-Based Missiles As US Aircraft Carrier Approaches

For all the expectations of a North Korean nuke test, the country"s "Day of the sun" celebrations ended up being a relatively subdued affair, with Pyongyang marking the 105th anniversary of its founding leader Kim Il-sung with a military parade in Pyongyang, where it for the first time publicly showcased its submarine-launched ballistic missiles as well as what appears to be a new type of ICBM, even as a U.S. aircraft carrier group steamed towards the region.

Missiles appeared to be the main theme of a giant military parade, with Kim"s grandson, leader Kim Jong Un, taking time to greet the commander of the Strategic Forces, the branch that oversees the missile arsenal. Wearing a black suit and white shirt and a tie and laughing with aides, the country’s hereditary leader oversaw the festivities on Pyongyang"s main Kim Il Sung Square as he welcomed and addressed thousands of soldiers who took part in the parade honoring his grandfather.

North Korean leader Kim Jong Un waves to people

As Reuters observes,, goose-stepping soldiers and marching bands filled the square, next to the Taedonggang River that flows through Pyongyang, in the hazy spring sunshine, followed by tanks, multiple-launch rocket systems and other weapons.

North Korean soldiers march during the "Day of the sun" military parade

Single-engine propeller-powered planes flew in a 105 formation overhead.

One notable difference: unlike some previous parades attended by Kim, there did not appear to be a senior Chinese official in attendance. China is North Korea"s lone major ally but has spoken out against its missile and nuclear tests and has supported U.N. sanctions. China on Friday again called for talks to defuse the crisis.

North Korean State TV showed images of the Pukkuksong-2 submarine-launched ballistic missiles (SLBMs) on trucks for the first time as the country continues to pursue an aggressive military and nuclear deterrent policy.  North Korea in February claimed that it successfully test-fired a surface-to-surface “medium long-range ballistic missile” known as the Pukkuksong-2, which is potentially capable of carrying a nuclear warhead.

Vehicles carry missiles with characters reading "Pukkuksong" during a military parade
marking the 105th birth anniversary of country"s founding father, Kim Il Sung

North Korea also showed off two new kinds of ICBM enclosed in canister launchers mounted on the back of trucks, suggesting Pyongyang was working towards a "new concept" of ICBM, said Melissa Hanham, a senior research associate at the U.S.-based Middlebury Institute of International Studies at Monterey, California. "It"s presumed to be a new ICBM. It seems longer than the existing KN-08 or KN-14 ICBMs," South Korean military official told Yonhap.

"However, North Korea has a habit of showing off new concepts in parades before they ever test or launch them," Hanham said. "It is still early days for these missile designs."

Some shots of the monster canistered unknown-and-untested (as far as we know) ICBM #NorthKorea just revealed. #JucheFest2017 pic.twitter.com/bZT3iOkfRL

— Ankit Panda (@nktpnd) April 15, 2017

A nes ICBM is driven past the stand with North Korean leader Kim Jong Un

In his address to soldiers, Choe Ryong Hae, a close aide to Kim Jong Un, addressed the packed square with a characteristically bellicose warning to the United States. "If the United States wages reckless provocation against us, our revolutionary power will instantly counter with annihilating strike, and we will respond to full-out war with full-out war and to nuclear war with our style of nuclear strike warfare," he said.

Earlier, state news agency KCNA said the Trump administration"s "serious military hysteria" had reached a "dangerous phase which can no longer be overlooked". The United States has warned that a policy of "strategic patience" with North Korea is over. U.S. Vice President Mike Pence travels to South Korea on Sunday on a long-planned 10-day trip to Asia.

China"s Global Times newspaper also rattled some cages when it said North Korea must have felt the shockwave from the 11-ton "mother of all bombs" dropped by U.S. forces on Islamic State-linked fighters in Afghanistan on Thursday. "It would be nice if the bomb could frighten Pyongyang, but its actual impact may just be the opposite."

North Korea on Friday denounced the United States for bringing "huge nuclear strategic assets" to the region as the USS Carl Vinson strike group with a flag-ship nuclear-powered aircraft carrier steamed closer.

North Korea Says It Successfully Test-Fired A Nuclear-Capable ICBM Which Can "Avoid Interception"

North Korea said it successfully test-fired a new type of medium- to long-range ballistic missile that is capable of carrying a nuclear warhead, the country"s state-run media said Monday. The North Korean missile flew over 500 kilometers, landing in the sea and stirring up world leaders, with the US rushing to reassure its allies South Korea and Japan.

The Korean Central News Agency (KCNA) said the Pukguksong-2 strategic weapon system was successfully test-fired Sunday adding that the missile launched from a mobile launcher used solid propellants and a new high-thrust engine developed in the country. The missiles also proved it can engage in evasive maneuvers during flight, the North said which is of note following the recent US deployment of Terminal High Altitude Area Defence (Thaad) in South Korea, meant to engage and intercept rogue launches by North Korea (while making China very nervous).

North Korea has conducted five nuclear tests, including two last year, although its claims to be able to miniaturize a nuclear weapon to be mounted on a missile have never been verified independently. KCNA said the missile was fired at a high angle in "consideration of the safety of neighboring countries" Reuters reported. A South Korean military source said on Sunday the missile reached an altitude of 550 km (340 miles).

North Korean leader Kim Jong-un was present for the launch and stressed that with the Pukguksong-2, Pyongyang now has another means to deliver nuclear weapons according to Yonhap. The country has tested a total of five nuclear devices since 2006, with two being detonated last year. The missile was launched at a high angle to take the security of the neighboring countries into consideration. The test-fire proved the reliability and security of the surface launch system, and the new engine, the news agency said.

The new missile was also successfully tested for its ability to dodge interceptors with evasive maneuvers, Yonhap news agency cited the statement as saying. Another major boost for North Korean missile technology is the solid fuel engine said to be used in the new weapon. Pyongyang has been testing the engine, which would give the rockets greater range and make the launches harder to detect, over the past year. The technology was said to be tested previously in a submarine missile launch.

"Now our rocket industry has radically turned into high thrust solid fuel-powered engine from liquid fuel rocket engine and rapidly developed into a development- and creation-oriented industry, not just copying samples," Kim was quoted as saying by the KCNA in English. 

The development of the new strategic weapon system will allow the People"s Army to perform its duties most accurately and rapidly in any space: "under waters or on the land," Kim said. The communist regime leader ordered the development of a surface-to-surface ballistic missile with extended firing range on the basis of the success made in the submarine-launched ballistic missile test in August last year, it said.

Meanwhile, as Reuters adds, despite his campaign vows to take a tougher line with North Korea, President Donald Trump"s restrained public reaction to Pyongyang"s first ballistic missile launch on his watch underscores that he has few good options to curb its missile and nuclear programs.

The responses under consideration - which range from additional sanctions to U.S. shows of force to beefed-up missile defense, according to one administration official - do not seem to differ significantly so far from the North Korea playbook followed by Trump"s predecessor, Barack Obama. Even the idea of stepping up pressure on China to rein in a defiant North Korea has been tried - to little avail - by successive administrations. But Beijing is showing no signs of softening its resistance under a new U.S. president who has bashed them on trade, currency and the contested South China Sea.

More dramatic responses to North Korea"s missile tests would be direct military action or negotiations. But neither appears to be on the table - the first because it would risk regional war, the latter because it would be seen as rewarding Pyongyang for bad behavior. And neither would offer certain success.

"Trump"s options are limited," said Bonnie Glaser, an Asia expert at the Center for Strategic and International Studies think tank in Washington.

As noted last night, Trump"s initial public comments on Saturday on the test launch of what was believed to be an intermediate-range Musudan-class missile were unexpectedly measured - and brief - compared to earlier bluster about another U.S. adversary, Iran, since he took office on January 20.  "I just want everybody to understand, and fully know, that the United States of America is behind Japan, our great ally, 100 percent," Trump told reporters in Palm Beach, Florida, speaking in a solemn tone alongside visiting Japanese Prime Minister Shinzo Abe.

The U.S. president did not mention North Korea or signal any retaliatory plans for what was widely seen as an early effort to test the new administration. By contrast, Trump tweeted "It won’t happen!" in January after North Korean leader Kim Jong Un said the North was close to testing an intercontinental ballistic missile.

While no one can rule out that Trump might still take to Twitter with harsh rhetoric as he often does, some analysts said his relatively subdued initial statement could show that aides have convinced him not to be baited by Pyongyang into issuing threats that would be hard to carry out, especially while his North Korea strategy is still being formulated. It might be a welcome change.