Emerging Asia FX-Won tumbles on N.Korea nuclear test news

SINGAPORE, Oct 9 (Reuters) The South Korean won tumbled more than one per cent today after North Korea said it had successfully conducted an underground nuclear test.

South Korean markets had been edgy and the won opened weak after North Korea's warning yesterday of catastrophic consequences after a weekend border incident with its southern neighbour. Reports of the nuclear test caused it to slide further.

The won slipped to levels around 960 per dollar, down 10 won from levels seen late on Wednesday last week. South Korean shares lost nearly 2.5 per cent.

South Korean markets were shut for festival holidays on Thursday and Friday.

The yen too suffered, weakening to a seven-month low of 119.15 per dollar and past 150 per euro Other Asian currencies were less affected. The Singapore dollar slipped a quarter of a percent to near 1.59 per US dollar.

Taiwan's markets were closed. The Indonesian rupiah and Philippine peso shed a quarter of a per cent each.

''South Korea has the biggest risk from the event,'' said one Singapore-based trader.

Some of the muted reaction in the regionals was explained by conflicting reports on the nuclear tests.

North Korea had carried out an underground nuclear test, the country's news agency said, and South Korea said it had detected a tremor in North Korea today morning. But US intelligence said they could not confirm a test had taken place.

Moreover, markets had been partly prepared after North Korea's announcement last week it was preparing to carry out a nuclear test.

''It seems the market was half-way prepared for it, so the knee-jerk response on regional markets is limited,'' said Deutsche Bank's currency strategist Mirza Baig.

Traders in Seoul said the rumours of the test had hurt the won in early trading, coupled with North Korea's threats on the weekend.

South Korea said its soldiers fired warning shots on Saturday at five North Korean soldiers who had climbed over the military demarcation line. Pyongyang's state-run media called it an unforgiveable military provocation and warned of consequences.

CURRENCIES VS US DOLLAR Change on the day at 0859 hrs IST Currency Latest bid Previous day Pct Move Japan yen 119.10 118.04 -0.89 Sing dlr 1.5890 1.5838 -0.33 Taiwan dlr 33.088 33.090 +0.01 Korean won 958.70 949.10 -1.00 Baht 37.57 37.53 -0.11 Peso 50.12 49.92 -0.40 Rupiah 9220.00 9200.00 -0.22 Rupee 45.58 45.58 +0.01 Ringgit 3.6925 3.6875 -0.14 Yuan 7.8995 7.9041 +0.06 Change so far in 2006 Currency Latest bid End prev year Pct Move Japan yen 119.10 117.96 -0.96 Sing dlr 1.5890 1.6625 +4.63 Taiwan dlr 33.088 32.850 -0.72 Korean won 958.70 1011.60 +5.52 Baht 37.57 41.11 +9.42 Peso 50.12 53.09 +5.93 Rupiah 9220.00 9835.00 +6.67 Rupee 45.58 45.04 -1.18 Ringgit 3.6925 3.7790 +2.34 Yuan 7.8995 8.0702 +2.16 Reuters DKA VP1000