US says North Korean missile test ended in fiery crash

Still, investors remained broadly cautious with safe-haven assets such as gold and Japanese yen remaining well supported before the landmark Trump-Xi summit on Thursday and Friday. “All three tried to leverage China but also failed”.

North Korean state media said the “Pukguksong-2” missile is a surface-to-surface missile that can carry nuclear warheads.

“A pre-emptive strike against launch facilities, underground nuclear sites, artillery and rocket response forces and regime leadership targets may be the only option left on the table”. And on a recent trip to Asia, Secretary of State Rex Tillerson reminded the region that the US also retains the option of pre-emptive military force.

A military confrontation on the Korean Peninsula could lead to a nightmare scenario in which nuclear weapons are used, or even to a larger clash between nuclear-armed global powers. That’s the question. We have to look at preemptive military action. And China, North Korea’s most important ally and only financial backer, has pursued an increasingly successful modernisation policy. But a senior US defense official said later that it was an extended-range Scud missile, which suffered an in-flight failure. Thornton acknowledged that North Korea would come up prominently in the meeting. The North may also be preparing for another nuclear test.

“It has invested heavily in the development of increasingly longer range ballistic missiles, and the miniaturization of its nascent nuclear weapons stockpile”, according to a report by the non-partisan CSIS.

USA crude rose for a second consecutive session to its highest levels in more than a month at $51.37 per barrel on Wednesday. “We have to take this threat very seriously”. Investors thus must be waiting with bated breath to see what comes out of the meeting between Trump and Chinese president Xi Jinping later this week. A second White House official said Tuesday that the topic may come up, though there was not expected to be any resolution. “You can tell Trump’s ideas are rooted in a US-centered position that assigns responsibility to China, arguing that China is the reason North Korea isn’t going the denuclearization route”, said Yonsei University professor Choi Jong-kun.

“President Trump campaigned on addressing trade deficits and unfair Chinese trade practices, and China is clearly in his sights”, says Myron Brilliant, head of global affairs the U.S. Chamber of Commerce.

Moreover, if China were to allow the currency to float freely, it would nearly certainly drop, said Simon Webber, lead portfolio manager for global and worldwide equities at Schroders.

Past U.S. presidents have often turned to settings away from the trappings of Washington to conduct delicate diplomacy. “A healthy dose of unpredictability is useful in our strategy with China”. Many weapons experts say the North could have a functioning nuclear-tipped missile capable of reaching the continental USA within a few years. Any provocation, they say, could backfire.

Rhetoric aside, neither Trump, with his saber-rattling, nor Xi, with his cheerleading on globalization, has yet matched talk with action.

Trump “is making it seem like we are prepared to go to war or use military action … and I don’t think that is going to be viable”, said Kurt Campbell, top USA diplomat for the region during former President Barack Obama’s first term.

Military tensions between Washington and Beijing have risen in recent years, primarily related to United States commitments to its allies in the region.

The U.S. maintains about 28,500 servicemembers in South Korea, which remains technically at war with the North after the 1950-53 conflict between the countries ended in an armistice instead of a peace treaty.

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