Following an uneventful weekend, ahead of which markets were on edge over another probable North Korean ICBM launch, the futures have breathed a sigh of relief, with the USDJPY and dollar jumping, while gold has tumbled by $10 from Friday’s highs.
That optimistic reaction, however, could be premature as Kim Jong Un may only be biding his time until Monday when the US is expected to seek more sanctions against North Korea in the UN. As reported on Friday, Washington wants the Security Council to vote on Monday to impose the sanctions, despite resistance from Beijing and Moscow to the new measures. The US has warned it would call for an oil embargo on Pyongyang, an assets freeze on leader Kim Jong-Un, but also an end to textile exports and to payments made to North Korean guest workers.
Confirming as much, and seemingly unaware of Keeping up with the Kardashians or the entire 2016 presidential election process, North Korea warned on Monday it would inflict “the greatest pain and suffering” on the United States if Washington persists in pushing for harsher UN sanctions tomorrow following Pyongyang’s sixth nuclear test.
In a statement published by the official KCNA news agency, North Korea’s foreign ministry warned Washington that if it did “rig up the illegal and unlawful ‘resolution’ on harsher sanctions, the DPRK shall make absolutely sure that the U.S. pays due price”. The ministry then said that “the forthcoming measures to be taken by the DPRK will cause the U.S. the greatest pain and suffering it had ever gone through in its entire history.”
“The world will witness how the DPRK tames the U.S. gangsters by taking (a) series of action tougher than they have ever envisaged.”
At a dinner to celebrate Pyongyang’s nuclear program, North Korean leader Kim praised the test and urged the country’s scientists to develop more weapons, KCNA reported Sunday.
The North says it needs nuclear arms to protect itself, but the US has accused the country of “begging for war”. Pyongyang’s drive to stage a slew of brazen tests in recent months, which contravene existing United Nations sanctions, has sparked surging tensions over the country’s weapons program.
Complicating matters, is a Friday report from NBC according to which any potential escalation in tensions between the US and North Korea would see China’s involvement on Pyongyang’s side, to wit:
“military strikes on North Korea could have serious repercussions, senior defense officials said, and the most glaring among these is that China has told administration officials that if the U.S. strikes North Korea first, Beijing would back Pyongyang, a senior military official told NBC.”
So with China most likely set to veto any UNSC sanctions on Monday, and threatening to side with Kim in case of a military conflict, today’s optimistic reaction to this weekend’s lack of an ICBM launch may prove to be rather short-sighted.