Gold spiked and USDJPY tumbled as headlines from Japan's Nikkei newspaper confirmed US military officials' observations last night that North Korea is said to show signs of missile launch preparation.
According to the Nikkei, citing an unidentified Japanese government official, the missile is being prepared for launch has engine for liquid fuel, suggesting missile is an ICBM. It adds that the missile is said to be fueled already, ready for launch. As Japan's Asahi further notes, the North Korean missile prep may be for a Hwason 14 ICBM and adds that missile prep is said to have started on Wednesday.
The immediate reaction was a risk-off spike in the Yen and dollar.
And comes on the heels of the release of satellite imagery showing notable instability around the site of North Korea's nuclear bomb testing facility, NBC reports that three US military officials have observed North korea moving mobile missile launchers and preapreing hard sites in the last 48 hours.
JUST IN: North Korea observed moving mobile missile launchers & preparing hard sites in last 48 hours, per 3 U.S. senior military officials— NBC Politics (@NBCPolitics) September 13, 2017
This comes just hours after 38North.org exposes details new commercial satellite imagery confirms earlier 38 North analysis identifying numerous landslides throughout the Punggye-ri Nuclear Test Site on the slopes of Mt. Mantap (and beyond) resulting from North Korea’s sixth nuclear test. These disturbances are more numerous and widespread than seen after any of the North’s previous five tests, and include additional slippage in pre-existing landslide scars and a possible subsidence crater. However, it is unclear from the imagery whether this subsidence is due to what has been reported as “a cave-in that was externally observable,” associated with the 4.6 magnitude event that occurred eight minutes after the test.
There also appears to be increased water drainage in the North Portal Area, likely stimulated by the large underground nuclear test. Such underground water flow stimulation (brought about by expansion of existing cracks and fissures) could also be expected to promote the transport of radionuclides to the surface, and is not inconsistent with a more recent reportthat some radionuclides (traces of Xenon-133) were detected in the environment following the test (by South Korea).
An apparent rectangular subsidence “crater” appears in the stratified volcanics at the basalt escarpment lip on the western corner of Mt. Mantap. This “crater” is likely what has been reported as a possible “collapse chimney crater,” but could also just be induced slippage prompted by the massive tremor. We may know more once synthetic aperture radar (SAR) imagery becomes available to potentially plot the epicenter of all of the surface disturbances.
Imagery from September 8 also shows a large tractor/trailer cargo truck in the South Portal Area for the first time, and mining carts and other equipment are present outside the West Portal. Such activity, coming shortly after the largest underground nuclear test conducted at Punggye-ri to date (via the North Portal), suggests that onsite work could now be changing focus to further prepare those other portals for future underground nuclear testing.
For the first time in over a year, activity was noted within the South Portal Area. A large tractor/trailer cargo truck was located in the area between the primary and secondary tunnel portals. The purpose of the vehicle is as yet unknown. It remains to be seen, however, whether or not the North Portal will ever be used for another nuclear test. There are still two unused additional tunnel complexes (served by the South and West Portals) that are also deemed potentially capable of conducting nuclear tests, albeit for tests having lower yields than that of the sixth test.
As North38 concludes, we also see no reason to alter our previous assessment that regardless of whether this most recent test was an operational warhead for an ICBM or simply a device, the yield of the test clearly shows North Korean progress in increasing the yields of their nuclear weapons.
The significance of this is that it has the potential to dramatically increase the threat posed by its Strategic Force (responsible for ballistic missiles) as individual nuclear warheads potentially now have 10-times (or more) greater destructive power. This would allow fewer missiles to be employed to ensure destruction of a given target, and increase the target areas threatened by North Korean ICBMs by allowing a larger number of targets to be engaged with the current missile inventory. If the claim that the device just tested has a variable yield is true (from tens to hundreds of kilotons), then this may also imply the North Koreans intend to adopt an expanded policy of using nuclear weapons, including tactical use, in addition to deterring threats to existence of the state. By doing so, they would join countries such as the United States, Russia, China, Pakistan, etc. that have policies regarding the use of tactical nuclear weapons, clearly further destabilizing the Korean peninsula situation.