Korea Kim

Korean relations enter a new phase

The death of Kim Jong-il ushers in another period of precarious uncertainty in the Korean peninsula, and rattles markets in Seoul.
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A memorial symbolising the reunification of the Korean Peninsula at the entrance to Pyongyang
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<div style="text-align: left;"> A memorial symbolising the reunification of the Korean Peninsula at the entrance to Pyongyang </div>

North Korea’s official news agency KCNA yesterday announced that Kim Jong-il died on Saturday. The death of the country’s dictator had been expected for many months he had pancreatic cancer yet markets in Seoul reacted negatively as a fresh period of nervous uncertainty entered the always precarious relationship between the two parts of the Korean peninsula.

The Kospi index of leading South Korean stocks plunged 5% and the won fell by 1.8% against the dollar. Young Sun Kwon, an analyst at Nomura, described Kim’s death as a “black swan” event, and expects geopolitical risks to rise.

The North or Democratic People’s Republic of Korea laid the groundwork...

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