North Korea may have shot mid-range missile

By Jon Herskovitz and Seo Eun-kyung

SEOUL (Reuters) - The U.S. pointman for sanctions on North Korea begins talks in Malaysia on Sunday, possibly on links banks have to the North's finances, while a report said Pyongyang may have shot mid-range missiles in a series fired on Saturday.

North Korea launched seven ballistic missiles, South Korea's defense ministry said, in an act of defiance toward the United States on its Independence Day, further stoking regional tensions already high due to Pyongyang's nuclear test in May.

"We are on high alert," a South Korean Defense Ministry source said, adding there were no initial signs more launches were coming on Sunday.

The launch, which marks an escalation of tensions by the North, will likely weigh on sentiment when markets open in Asia on Monday, but investors do not expect a major impact.

The North appears to have fired two mid-range Rodong missiles, which can hit all of South Korea and most of Japan, and five Scud missiles, which can strike most of South Korea, Yonhap news agency quoted a South Korean official as saying.

The official said two of the missiles travelled at a greater velocity than the others, indicating they were the Rodong type.

"We found five of the seven missiles fell near the same spot in the East Sea (Sea of Japan), which indicates that their accuracy has improved," another official told Yonhap.

The missiles flew about 420 kms (260 miles) and it will take a few days to confirm what was fired, the official said. Initial reports on Saturday said all the missiles appeared to be Scuds.