North Korea Missile Guam

Picture of North Korea Missile Guam


AdvertisementSEOUL, South Korea — North Korea carried out one of its most provocative missile tests in recent years early Tuesday morning, hurling a ballistic missile directly over Japan that prompted the government in Tokyo to warn residents in its path to take cover.The missile flew over the northern island of Hokkaido and landed harmlessly in the sea, after a flight of nearly 1,700 miles. But the propaganda value for the North Koreans was considerable.


Public television programs in Japan were interrupted with a rare warning screen announcing the missile’s flight over the country. Several bullet train lines were temporarily halted, and the government spoke of the missile — only the third North Korean projectile to fly over the country since 1998 — in unusually dire terms.“North Korea’s reckless action of launching a missile that passed over Japan is an unprecedented, serious and grave threat,” said Japan’s prime minister, Shinzo Abe.


He later told reporters that he had spoken by telephone with President Trump. “Japan and the U.S. stances are completely matched,” he said, adding that they discussed ways to tighten pressure on North Korea.The test was a direct challenge to Mr. Trump. Just last week, at a political rally in Arizona, Mr. Trump suggested that his threat to rain down “fire and fury” on North Korea if it endangered the United States was beginning to bear fruit.


Kim Jong-un, the North Korean leader, was “starting to respect us,” Mr. Trump said.Secretary of State Rex W. Tillerson had also cited a pause in testing by the North, saying he was “pleased to see that the regime in Pyongyang has certainly demonstrated some level of restraint that we have not seen in the past.” Mr. Tillerson suggested that it could be a “pathway” to dialogue.Only days later, that optimism seemed premature when the North Koreans launched three short-range missiles on Saturday.


Two of them traveled about 155 miles before splashing down, far enough to reach major South Korean and American military bases, including those about 60 miles south of Seoul.While North Korea has not carried out its threat to fire four of its ballistic missiles toward the coast of Guam — and near an American air base — the missile it fired over Japan on Tuesday appeared to be of the same type: an intermediate-range missile that could target American, South Korean and Japanese bases in northeast Asia.


Only twice before has the North fired projectiles over Japanese territory: once in 1998, prompting a minor diplomatic crisis in Asia, and once again at the beginning of the Obama administration in 2009. In both those cases, the North said the rockets were carrying satellites into orbit. In this case, it made no such claim.As in the case of the 2009 launch, which was paired with a nuclear weapons test, North Korea appears to be testing a new American president.


Notably, the missile fired on Tuesday took off from near Pyongyang, North Korea’s capital. Early reports, which are often corrected later, indicated it was launched from a site near Pyongyang’s international airport, not the usual launch site in the northeast, according to the South Korean military. They said they were still trying to determine what type of missile was launched.American officials noted that if it was in fact launched from the capital’s outskirts, it may have been meant to complicate recent American threats to hit the North with pre-emptive strikes.


That possibility was explicitly raised this month by Trump administration officials, as a way of seeking to deter the North Koreans.While the North’s usual launch sites are in remote areas, where there would be little concern about civilian casualties, any strike near Pyongyang would risk many civilian deaths and would suggest the real goal was to strike at the regime.An attack near Pyongyang would also be far more likely to result in North Korean retaliation against Seoul.


Lt. Gen. Hiroaki Maehara, the commander of the Japan Air Self-Defense Force’s Air Defense Command, said that the armed forces did not try to shoot down the missile from North Korea on Tuesday because they did not detect a threat to Japanese territory.But when the government detected the launch and followed the path of the missile, it warned citizens in its path to take cover — just in case any parts fell on Japan.


According to Itsunori Onodera, Japan’s defense minister, the missile launched Tuesday was very likely a Hwasong 12, which is classified as intermediate range and is fired from mobile launchers. North Korea successfully tested a Hwasong 12 in May.Prime Minister Shinzo Abe of Japan at his official residence in Tokyo on Tuesday. “We have lodged a firm protest to North Korea,” Mr. Abe said. “We have requested an urgent meeting of the U.


N. Security Council.”CreditKimimasa Mayama/European Pressphoto AgencyThe North Korean missile tests on Saturday and again on Tuesday came during joint military drills that the United States and South Korea started a week ago. For the United States and South Korea, these drills — mostly conducted on computer screens — are normal exercises. But the North calls such annual drills a rehearsal for invasion and often lashes out with weapons trials and military exercises of its own.


The United States has also been conducting joint exercises with Japanese forces for the past two weeks, and it was Japan that seemed most directly affected by Tuesday’s launch.Speaking on national television, Mr. Abe said his government “was prepared to take all the measures to protect people’s lives.”“We have lodged a firm protest to North Korea. We have requested an urgent meeting of the U.


N. Security Council,” he added. Diplomats said the meeting would most likely be Tuesday afternoon.The Japanese government sent a text alert to citizens about the launch and advised them to take protective cover. In a post on Mr. Abe’s Twitter account, the government confirmed that the missile was fired at 5:58 a.m. local time, before breaking into three pieces and landing about 730 miles off the coast of Cape Erimo on Hokkaido, around 6:12 a.


m.Takaaki Uesugi, a security guard at the town hall of Erimo, on the southern tip of Hokkaido, said he first heard about the launch from an alert on his phone.The United States uses two different categories of missile defense to counter North Korea. Here’s how they work and — sometimes — how they don’t.Published OnAug. 27, 2017“I’m really worried about how America will react,” he said.


“It’s possible that Japan could be dragged into a dangerous situation depending on how President Trump responds to this.”A woman in Tokyo, Kaoru Kuroko, also said she had heard an alarm on her telephone soon after the missile was launched. “It was scary,” she said. “I wondered, where will the missile go to?”South Korea said it was ready to defend itself from the North Korean threat. “North Korea must come to the negotiating table, realizing that denuclearization is its only way to ensure its security and economic development,” the South Korean Foreign Ministry said in a statement on Tuesday.


With China to the west and Russia to the north, North Korea can flight-test its mid- or intermediate-range missiles only to the south or to the east, analysts said.“In a way, this was a hard choice to make for the North because it meant to fire the missile over Japan or toward Guam,” said Kim Yong-hyun, a professor of North Korean studies at Dongguk University in Seoul. “In the end, it chose to fire over Japan, demonstrating its capability to launch a missile to Guam but without actually launching one in that direction, which would have been a huge provocation to the United States.


”North Korea has conducted more than 80 missile tests since Mr. Kim came to power in late 2011, after the death of his father, but it has not sent any of those missiles over Japan.Even when it flight-tested an intercontinental ballistic missile on July 28, it was launched at a highly lofted angle so that it reached an altitude of 2,300 miles. But it flew only 998 horizontal miles, falling in waters between the North and Japan.


The North said at the time that it did so in order not to send its missile over a neighbor. Thus, the missile test on Tuesday was considered especially bold.Along with South Korea, Japan and Guam would most likely be the first targets of a North Korean attack should war break out on the Korean Peninsula, analysts said. Both are home to major American military bases.Choe Sang-Hun reported from Seoul and David E.


Sanger from Boston. Reporting was contributed by Motoko Rich from Yokota, Japan, Hisako Ueno, Makiko Inoue and Kaho Futagami from Tokyo, and Rick Gladstone from New York. A version of this article appears in print on , on Page A1 of the New York edition with the headline: Route of Missile By North Korea Unnerves Japan. Order Reprints | Today’s Paper | SubscribeAdvertisement


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From July to mid-September, North Korea launched five missile tests, including two intercontinental ballistic missiles. And after a break of nearly three months, North Korea launched another missile, which appears to have crashed into Japan's exclusive economic zone on Tuesday. "Little Rocket Man" is back, as will headlines attributing short-term volatility in the market to a potential geopolitical crisis.


The markets did wobble on the missile headlines, the VIX shot up, and with stocks at record highs, it would not be a surprise to see more volatility. But during Kim Jong Un's six-year reign, he has tested more missiles than his father and grandfather combined, including 15 tests in 2017. And based on this history, there's one piece of advice that may come in handy for investors (and the current president) as Kim Jong Un flaunts his latest nuclear success: Don't overreact.


In fact, for investors, don't do anything. Consider the country stock market arguably facing the gravest existential threat from a nuclear crisis: South Korea. There is reason not to be complacent. U.S.-based investors may have more exposure to South Korea than they realize. Financial advisors and retail investors have been piling into overseas stocks, primarily through exchange-traded funds based on the MSCI and FTSE developed (EAFE) and emerging markets (EM) indices.


Those indexes have significant exposure to South Korea. MSCI defines South Korea as an emerging market, and its emerging markets index has between 14 percent to 15 percent exposure to South Korea. The iShares Core MSCI Emerging Markets ETF (IEMG) has taken in $15 billion from investors in the year-to-date period. FTSE defines South Korea as a developed market, and its EAFE index has between 4 percent to 5 percent exposure to South Korean stocks.


The Vanguard FTSE Developed Markets ETF (VWO) has taken in roughly $10 billion from investors this year. But here is what the South Korean stock market returned between the July to mid-September periods, when missiles were flying: 1.37 percent. Year-to-date, the South Korean stock market is up roughly 44 percent. Japan, which said it was the target of Tuesday's missile test, is the largest country weighting in the MSCI EAFE Index, at 24 percent.


It has boomed this year, outpacing the S&P 500, as part of a develop markets recovery around the globe. Year-to-date the three top EAFE ETFs have taken in more than $46 billion, according to XTF.com. There's a much longer history of North Korean missile tests than just this summer provided. Using Kensho, which provides CNBC with historical context for market-moving events, we looked at the reaction of major world assets after every missile test from 2003 to the present, 80 missile tests in all.


The results: more muted than investors might expect. Without overreacting, concern about North Korea is rational for any investor. Just ask Warren Buffett. Last week the world's second-richest man said, "We have increased the ability of perhaps even an individual, perhaps a group, perhaps a nation ... to kill millions, millions, millions of people in a single stroke." Buffett added, "We got a fellow in North Korea [with a] very poor country, spending a way disproportionate amount of its GDP working on missiles that can hit California.


That's crazy," he said. "Wish I had a solution for it, but I don't." It's the "lack of solution" part that should bring investors backs to their senses, because especially in a markets' sense, there isn't anything investors can do about weapons of mass destruction. Do you really want to try and master game theory as an investor? The Wells Fargo Investment Institute has done some of that work for investors already, anyway.


"When you start assessing what the different outcomes might be and assign probability to each one, we still believe its biggest ally and biggest adversary, China and the United States, will together partner in order to put enough diplomatic pressure on North Korea to bring them back to table," said Sameer Samana, global quantitative strategist at the Wells Fargo Investment Institute, which recently sent some of its team on an Asia tour and trip to South Korea.


Other Asian investing specialists agree. Michael Oh, portfolio manager at Matthews Asia — the largest Asia-only investment manager based in the United States, with more than $31 billion in assets under management — wrote to the firm's clients at the height of summer tensions: "A positive outcome out of this complicated situation is that this may force China, Russia, South Korea, North Korea and the U.


S. to finally engage in some kind of multilateral dialogue." Samana explained the Wells Fargo group's "intuitive analytical game theory framework" this way: What do all the actors really want? When we consider the possibility of conflict, how badly do the parties — the United States, China, North Korea and South Korea — want to refight the Korean War? What might happen in that conflict? "When we try to work through the questions, almost nobody wants it to happen.


Could have major casualties in South Korea. Major casualties in North Korea. China drawn in and a possible loss of a critical ally on the border. Nobody wins," Samana said. "So we come back with a low probability." Recent comments from CIA officials indicate that the agency believes the North Korean leader is a "rational actor" motivated by goals that will ensure regime survival. White House Chief of Staff General John Kelly told reporters this week that the North Korea threat is currently "manageable.


" More from Global Investing Hot Spots:Defense stocks soar on the spectre of war with North KoreaThe biggest stock market trade of the year may be at a tipping point But there's one big caveat that fits the current period: "History shows when things spiral out of control it's when we have rhetoric amping up and military exercises and missile tests and a flurry of activity," Samana said. "It's always possible to have an accident, a miscommunication.


" Republican Sen. Bob Corker said in an Oct. 8 interview with the New York Times that all Americans should be worried Trump's rashness could lead the country into World War III. Defense Secretary Jim Mattis said on Oct. 9 that the U.S. Army should be ready with North Korea military options that "our president can employ, if needed." Speaking at an Army convention in Washington, Mattis said diplomatic efforts and sanctions continue "to try to turn North Korea off this path.


" A North Korean official said in October that Trump had lit "the wick of war," and the final score will be settled "with a hail of fire, not words." More recently, Trump tweeted that Kim Jong Un was "short and fat" after the North Korean leader made a derogatory reference to Trump's age. Samana said even taking into account "unintentional paths to conflict," it is a low-probability event. "This isn't the first time tensions on the Korean Peninsula have been raised, only for them to be reduced again over a period of time," Oh reminded Matthews Asia clients.


"Our basic assumption, given the seriousness of any conflict, is that there will not be a full-scale war breaking out on the Korean Peninsula." Oh also noted that while "there has been some reaction in the markets, it has been more muted than headlines would suggest." North Korea is "still simmering below surface," Samana said, but once you start investing in a diversified global portfolio, there will always be hot spots — that includes the United States.


"Our client base has a rotating list of things they are concerned about. Early in the year it was U.S. politics, then French elections, then North Korea. There's almost always something on the front page that has implications for investor portfolios," Samana said. "Either you are avoiding all the major large developed markets and trying to find idiosyncratic exposure, or just embrace it as an investor and stick to a plan.


" The Wells Fargo official admitted that he has been surprised that we haven't seen bigger selloffs in markets closest to North Korea. China has done well. South Korea has done well. And emerging markets more broadly have been some of best-performers this year. "It has been a little surprising we have not seen a rotation away from some of markets closest," he said. But what looks like "lots of complacency," in Samana's words, isn't as concerning when investors consider what they can and can't control.


Global bankers are still pumping money into the financial system, and pullbacks have been so short and shallow, investors have been rewarded for ignoring some of these risks. And with North Korea, "you struggle as a person to quantify this," Samana, the quantitative analyst, said. "It's not easy. It involves a small group of human beings, and human nature is notoriously difficult to quantify." So that leaves investors with the metrics they can quantify: in addition to the central banking liquidity, global economic growth, increasing corporate profits and valuation.


"And that's what has been going on," Samana said. Ameriprise chief market strategist David Joy said it's these quantifiable factors that will continue to dominate actual market action: "Economic conditions are conducive to higher equity prices, and markets will continue to focus on this until compelled to do otherwise." This story has been updated to reflect the latest missile test conducted by North Korea on November 28 and markets performance through Nov.


28. (Disclosure: NBC Universal, CNBC's parent company, is a minority investor in Kensho.)


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