The Korean government convened on January 6 afternoon an emergency meeting over the impact of North Korea’s nuclear test on Korea’s financial markets.

North Korea’s official Korean Central News Agency reported at 12:30 p.m. that North Korea had conducted a hydrogen bomb test after a 4.8 magnitude earthquake had been detected near its north east Yanggang Province at around 10:30 a.m.

The government officials at today’s meeting checked the possible impact on Korea’s financial markets and discuss policy responses ahead, given that geopolitical risks of the Korean economy are likely to be heightened with the latest nuclear test by North Korea.

Korea’s financial markets showed increased volatility right after the report of North Korea’s nuclear test but soon recovered. 

The government sees that Korea’s financial markets are not likely to be significantly affected by today’s nuclear test, given that impacts of previous events of North Korea- related issues were temporary and limited.

However, the government will remain vigilant against any possibility that uncertainty such as a possibility of further nuclear tests could expand volatility in Korea’s financial markets and real economy, amid market’s overreaction to recent events such as Chinese’ stock market plunge and Middle East instability.

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