North Korean Missile Test Imminent

SEOUL/WASHINGTON (Reuters) - South Korea said on Wednesday there was "very high" probability that North Korea, engaged in weeks of threats of war, would launch a medium-range missile at any time as a show of strength despite diplomatic efforts to soften its position.

Foreign Minister Yun Byung-se said South Korea had asked China and Russia to intercede with the North to ease tension that has mounted since the U.N. Security Council slapped fresh sanctions on Pyongyang after a new nuclear arms test in February.

But all was calm in the South Korean capital, Seoul, long used to North Korean invective under its 30-year-old leader Kim Jong-un. Offices worked normally and customers crowded into city-center cafes.

Seoul stocks edged up 0.77 percent from a four-and-a-half-month low hit earlier this week, though trading was light with threats from the North still clouding the picture. The won currency gained 0.3 percent.

Other officials in Seoul said surveillance of North Korean activity had been enhanced. Missile transporters had been spotted in South Hamgyong province along North Korea's east coast - possible sites for a launch.

North Korea observes several anniversaries in the next few days and they could be pretexts for military displays of strength. These include the first anniversary of Kim's formal ascent to power, the 20th anniversary of rule by his father Kim Jong-il, who died in 2011, and the birth date next Monday of his grandfather, state founder Kim Il-Sung.

The near-daily threats to South Korea and the United States of recent weeks were muted in state media on Wednesday, with the focus largely on the festivities lying ahead.

A report by the KCNA news agency said North Koreans were "doing their best to decorate cities". Another dispatch related a "production upsurge" in the coal, steel, iron and timber industries, with figures showing that the quarterly plan set by authorities had been "overfulfilled".

In Washington, Admiral Samuel Locklear, the commander of U.S. forces in the Pacific region, also said the U.S. military believed North Korea had moved an unspecified number of Musudan missiles to its east coast.

The Musudan can reach targets at a distance of 3,500 km (2,100 miles) or more, according to South Korea, which would put Japan within range and may even threaten Guam, home to U.S. bases. South Korea can be reached by the North's short-range Scud missiles.

MISSILE LAUNCH POSSIBLE "AT ANY TIME"

Foreign Minister Yun told a parliamentary hearing: "According to intelligence obtained by our side and the U.S., the possibility of a missile launch by North Korea is very high."

North Korea, he said, could launch a Musudan missile "at any time from now".

The U.S.-South Korea Combined Forces Command in Seoul raised its "Watchcon 3" status, a normal condition, by one level to boost monitoring and increase the number of intelligence staff, a senior military official told the South's Yonhap news agency.

Yun said he was coordinating with China and Russia "to make efforts to persuade North Korea to change its attitude".

China is North Korea's sole major ally, although its influence over Pyongyang is open to question and Beijing has, in any event, backed the new sanctions. Moscow backed North Korea in Soviet times, though its influence has waned unquestionably.

A Chinese Foreign Ministry spokesman issued a fresh appeal for restraint on the Korean peninsula and said nothing about any possible effort to bring about a change in the North's policy.

Patricia Lewis, Research Director at the London-based think tank Chatham House, said that strictly on the basis of the North's vast conventional forces, caution was required.

"The conventional military capabilities of North Korea are all too real and all too close to Seoul," she wrote in a paper. "Any incursion could escalate involving the U.S. and Japan, China, perhaps Russia and others."

Pyongyang has tested short-range Scud missiles. The longer-range Musudan and Nodong missiles are an unknown quantity.

"If the missile was in defense of the homeland, I would certainly recommend that action (of intercepting it). And if it was defense of our allies, I would recommend that action," Locklear told a Senate hearing in Washington.

Pyongyang has threatened a nuclear strike on the United States - something it does not have the capacity to carry out - and "war" with "puppet" South Korea - threats that appear to be aimed at least in part at boosting internal support for Kim.

WEEKS OF EXERCISES

The North is also angry at weeks of joint South Korean-U.S. nuclear exercises. About 28,000 U.S. forces are permanently based in South Korea.

U.S. Secretary of State John Kerry visits Seoul this week.

On Tuesday, the North told foreigners in South Korea to leave to avoid being dragged into a "thermonuclear war". It previously warned diplomats in Pyongyang to prepare to leave.

The North closed a money-spinning industrial park it operates with South Korean companies this week, putting at risk a venture that is one of its few sources of hard cash.

Officials said 292 South Koreans remained in the complex just inside the North Korean border, apparently waiting for clarification over Pyongyang's plans.

In China's northeast region of Dandong, tour operators said they had been told by local authorities to halt overland tourism to North Korea and some tourists were turned away. Other tours, including those involving air travel, were operating as usual.

Chinese figures showed exports to North Korea fell 13.8 percent in the first quarter of the year compared to last year, with total trade pegged at $1.3 billion, a decline of 7.2 percent, though such figures are notoriously unreliable and the customs authorities would not say why the numbers dipped. AFT