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A South Korean woman reads The Korean Herald's report on North Korea's launching of missiles. - 


SCOTT JAGOW: Word out of North Korea today is upsetting currency and stock markets around the world. North Korea said for the first time, it exploded a nuclear weapon. The U.S., Japan, Britain and other countries immediately condemned the underground test. The Japanese Yen plunged to an eight-month low against the dollar. Jocelyn Ford has more on the markets' reaction.

JOCELYN FORD: Share prices in Seoul lost 2.4 percent, after initially falling more than 3.5 percent. Hong Kong's Heng Sang index fell 1 1/3 percent. Markets in Japan were closed for a holiday.

But some analysts expect the economic impact on the Korean Peninsula and the region to be short-lived.

The U.S. and Japan have agreed to seek further action at the United Nations, but in the past, North Korea's major economic partners Beijing and Seoul have been opposed to stronger action like economic sanctions.

Professor Yoon Deok Ryong is with the Korea Institute for International Economic Policy

YOON DEOK RYONG:"Only if China and Korea would join economic sanctions, then it will have real impact on North Korea's economy. But I think China does not want North Korea's collapse."

And neither does South Korea.

Professor Yoon says the two countries may be willing to reduce economic ties, but not severe them.

In Beijing, I'm Jocelyn Ford for Marketplace.

JAGOW: We'll see how Wall Street reacts to the North Korean developments later this morning.