17 seconds ago 2009-11-25T17:22:03-08:00
SEOUL (Reuters) – The two Koreas had a brief naval skirmish in Yellow Sea waters on Tuesday, but there were no casualties in the incident that came just ahead of a visit to Asia by U.S. President Barack Obama, Yonhap news agency reported.
North Korea, which has a habit of increasing tension prior to major regional diplomatic events, has been seeking direct talks with the Obama administration while riling the global powers by last week saying it had produced more arms-grade plutonium.
"A North Korean patrol ship crossed the Northern Limit Line and did not cease when we fired warning shots," Yonhap cited a South Korean defense source as saying.
The North's vessel then fired back, the source said. It appears the North's vessel was hit by the South in the firefight.
Military officials could not immediately confirm the reports.
The two Koreas have fought two deadly naval battles in the past decade in the Yellow Sea waters near the contested sea border called the Northern Limit Line.
The NLL was set unilaterally by U.S-led U.N. forces at the end of the 1950-53 Korean War. The North has said it sees the border as invalid.
The South Korean won briefly retreated on the news. There was no noticeable impact on bonds while foreign investors kept up their buying spree of local equities.
"We will have to see what the incident means and how it came," but it's unlikely to have a lasting impact," said Choi Chang-ho, a market analyst at Shinhan Investment Corp.
Investors have grown used to the North's saber rattling but said incidents such as this sour the mood and remind market players of the security threat North Korea poses to North Asia, which is responsible for one-sixth of the global economy.
"North Korea is taking this aggressive stance to show they're not backing down their security," said Yang Moo-jin, a professor at the South's University of North Korean Studies.
(Reporting by Kim Yeon-hee, Rhee So-eui, Christine Kim and Seo Eunkyung; Writing Jon Herskovitz; Editing by John Chalmers)
