Yen, stocks drop after N.Korea nuclear-test news

HONG KONG, Oct 9 (Reuters) The yen slumped to a seven-month low, Asian stocks sagged and oil and gold climbed on Monday after North Korea said it had conducted a nuclear test.

Pyongyang's official Korean Central News Agency said there was no leak or danger from the test. South Korea and U.S. geological officials said they had detected a tremor in North Korea on Monday morning.

Worries about North Korea had cast a shadow over otherwise strong Asian markets in the past several days as investors have braced for an escalation of tensions.

The UN Security Council had urged North Korea against conducting a nuclear test, warning Pyongyang of unspecified consequences.

''There's plenty of profits to be taken with global markets near multi-year or record highs, so the market is sensitive to negative news,'' said Andrew To, sales director at Tai Fook Securities in Hong Kong.

Regional stock markets fell across the board with South Korea hardest hit.

The benchmark KOSPI stock index <.ks11> dropped as much as 3.6 percent to levels last seen on Aug. 14. It was down 2.38 percent by 0435 GMT.

The won shed more than 1 percent to one-month lows.

Japan's financial markets were closed for a public holiday on Monday but the MSCI's index of shares in Asia outside of Japan <.msciapj> was down around 1 percent.

''The economy of North Korea is virtually closed from the rest of the world and its regional impact won't be very significant unless there was a major military confrontation,'' said Wang Qing, an economist at Bank of America in Hong Kong.

Hong Kong's Hang Seng index <.hsi> and Singapore's Straits Times Index <.sti> both fell more than 1 percent.

Main indexes in Jakarta <.jkse>, Sydney <.axjo>, Bangkok <.seti> and Manila <.psi> also slid.

YEN FALLS The dollar rose as high as 119.16 yen after the reports on the nuclear test and the euro strengthened above 150 yen .

The dollar also found support on expectations that U.S. interest rates were unlikely to fall any time soon after a government report on Friday showed strength in the jobs market.

U.S. crude rose around 1 percent to .46, although dealers said the main focus of the market was on a formal deal expected on Monday by OPEC to cut 1 million barrels a day of crude from oversupplied markets.

However, the geopolitical tensions played a part.

''This is the sort of thing that causes tension in the world and tension is associated with bumps upwards in oil prices,'' said John Vautrain, vice-president of energy consultancy Purvin and Gertz in Singapore.

Spot gold climbed more than 1 percent to a high of 9.80 an ounce, up from around 3.30 on Friday, with buying picking up after the North Korea reports.

However, bullion traders said trading volumes were low so price movements were exaggerated.

REUTERS SBA BD1201