North Korea May Have Fired Shells Into Disputed Coastal Waters, South Says

North Korea may have fired artillery shells into its water near the disputed western border with South Korea today, a government official in Seoul said.

None of the shells fell crossed the border into South Korean waters and the government is examining the incident, an official at President Lee Myung Bak’s office said by telephone from Seoul, confirming reports by Yonhap News and YTN television broadcaster. The official declined to be named because of government policy.

North Korea fired artillery toward South Korea’s Baengyeong island as part of what appears to be regular drills, Yonhap reported, citing an official at the presidential office in Seoul it didn’t identify.

Tensions have risen on the Korean peninsula since North Korea shelled South Korea’s Yeonpyeong island, also near the western sea border, on Nov. 23, killing four people. South Korea’s military this week began live-firing exercises off its coastline in more than 20 areas, including near another border island off the west coast.

The MSCI Asia Pacific Excluding Japan index was trading 0.7 percent down at 11:39 a.m. in Seoul, having been 0.25 percent lower before the Yonhap report. South Korea’s benchmark Kospi also dropped into negative territory before paring some of its losses to trade little changed at 1961.76.

The won extended losses after the reports, sliding 0.9 percent to 1,141 won against the dollar.

The Ministry of National Defense and the Joint Chiefs of Staff declined to comment on the reports.

Admiral Mike Mullen, the chairman of the U.S. Joint Chiefs of Staff is in South Korea for talks with military officials.

North Korea doesn’t recognize the so-called Northern Limit Line demarcated by the United Nations after its 1950-53 war with South Korea. The North demands the border should be redrawn to include Baengyeong, Yeonpyeong and three other islands part of its territory.

The attack on Yeonpyeong was North Korea’s first shelling of South Korean soil since the war and came after Kim Jong Il’s regime was blamed for torpedoing the South Korean warship Cheonan in March, killing 46 sailors.

To contact the reporter on this story: Bomi Lim in Seoul at blim30@bloomberg.net

To contact the editor responsible for this story: Bill Austin at billaustin@bloomberg.net

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