(Bloomberg) — North Korea fired two short-range missiles
into its eastern waters as the U.S. and South Korea began joint
military drills that Kim Jong Un’s regime claims are
preparations for an invasion of the isolated state.

Both missiles were fired about 490 kilometers (305 miles)
into the sea between North Korea and Japan from the western
coastal city of Nampo, according to South Korea’s Defense
Ministry North Korea said Monday it would not remain passive
in response to the exercises.

Japan immediately protested the launches in a twitter post
from the office of Prime Minister Shinzo Abe. Diplomatic efforts
to pressure North Korea to abandon its atomic-weapons program
are floundering, and the nation continues to threaten a fourth
nuclear test.

“The launches are North Korea’s response to the start of
the drills,” Koh Yu Hwan, a North Korea professor at Dongguk
University in Seoul, said by phone. “These types of launches
tend to subside once the drills get on their way, yet North
Korean troops will stay on high alert.”

The launches are the first since North Korea fired missiles
early February into the water known in South Korea as the East
Sea, and in Japan as the Sea of Japan.

South Korean defense stocks rose Monday by as much as 4.5
percent in Seoul to the highest intraday level since May.

War-Ready

Kim instructed senior officials to keep troops ready for
war on a visit to a museum commemorating the Korean War, the
state-run Rodong Sinmun newspaper reported Saturday. North Korea
says the exercises are preparations for invasion, while the U.S.
and South Korea say they are purely defensive.

Key Resolve, a computer-simulated drill, ends March 13, and
Foal Eagle, a field exercise, will finish on April 24.

The prospect of a breakthrough in efforts to restart six-party talks on North Korea’s nuclear program rose after a series
of diplomatic meetings in January. But after U.S. President
Barack Obama criticized the regime for its human rights record
in an interview on YouTube, North Korea said on Feb. 4 said it
would no longer “sit face-to-face” with the U.S.

“Diplomacy will probably take a back seat during the
drills,” Koh said. “But we should also note diplomats haven’t
jettisoned the efforts to restart the six-party talks.”

The six-party track involving North Korea and South Korea,
China, Japan, Russia and the U.S. collapsed in 2009 after the
government in Pyongyang walked out in response to United Nations
condemnation of a long-range rocket launch.

North Korea may have as many as 100 nuclear arms in five
years and become capable of mounting them on a range of road-mobile missiles, Joel Wit, a researcher at the U.S.-Korea
Institute at Johns Hopkins University, said Feb. 24.

In an e-mailed analysis to Bloomberg News, Wit said his
moderate projection for North Korea’s nuclear stockpile is for
it to grow to 50 bombs by 2020 while the country develops a new
generation of road-mobile medium- and long-range missiles tipped
with nuclear warheads.

To contact the reporter on this story:
Sam Kim in Seoul at
skim609@bloomberg.net

To contact the editors responsible for this story:
Rosalind Mathieson at
rmathieson3@bloomberg.net
Andy Sharp, Greg Ahlstrand