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North Korea seen eyeing possible ICBM launch after nuclear test

[SEOUL] South Korea detected that North Korea is continuing to prepare 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, but didn't give a timeframe for a potential launch. The yen extended gains against the dollar after the news.

South Korea's spy agency said there is a chance North Korea could fire an ICBM into the Pacific Ocean, adding that the isolated state was able to conduct a nuclear test at any time, the Yonhap news agency reported. North Korea had threatened last month to launch missiles toward Guam, which prompted warnings of retaliation from American military officials.

South Korea earlier in the day paved the way for the full deployment of a US missile defense system while its military conducted a live-fire drill with North Korea's test site as the virtual target. The Environment Ministry on Monday conditionally approved an environmental impact report on the Terminal High-Altitude Area Defense system.

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That removes the final administrative hurdle for complete installment of the missile shield, known as Thaad, which China sees as a threat to the region's "strategic equilibrium." South Korea's Defense Ministry said it would install the system's remaining launchers "soon." The governments in Seoul and Washington were also discussing deployment of a US carrier group and strategic bombers, Yonhap said.

Following the nuclear test, US President Donald Trump threatened to increase economic sanctions and halt trade with any nation doing business with North Korea - a threat he has used before without following through. That list would include China, the US's biggest trading partner, which accounted for about a sixth of its overseas commerce.

China hit back at Mr Trump's threat, with Foreign Ministry spokesman Geng Shuang saying the comments were "neither objective nor fair.""What is definitely unacceptable to us is a situation in which on the one hand we work to resolve this issue peacefully but on the other hand our own interests are subject to sanctions and jeopardized," Mr Geng said at a regular briefing in Beijing, according to the Associated Press.

Asian stocks fell on Monday as investors turned to haven assets, sending the yen, gold and Treasury futures higher. The biggest declines were in Tokyo and Seoul, with more moderate reactions elsewhere in the region.

Mr Trump, who threatened over the weekend to pull out of the US-South Korea trade agreement, took a shot at President Moon Jae-in's administration after the nuclear test. On Twitter, he said that South Korea is finding that its "talk of appeasement with North Korea will not work." In response, Mr Moon's office said that war shouldn't be repeated and that South Korea and its allies "will pursue the denuclearization of the Korean peninsula through peace." The two leaders haven't spoken since North Korea detonated what it called a hydrogen bomb.

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