China says North Korean tensions are at a 'tipping point'

Just before 2200 BST on Monday a missile was launched from near the North Korean capital of Pyongyang over Hokkaido, on the northern island of Japan, before falling in to the Pacific Ocean about 773 miles of the coast.

Residents in northern Japan received a text message at 2202 BST, minutes after the launch, advising them to seek shelter.

"Missile launched. Missile launched. It seems that the missile has been launched from North Korea. Please evacuate to building with strong structure or go to the basement."

Japanese Prime Minister, Shinzo Abe, who shared a 40-minute-long conversation with Donald Trump after the launch, said the move by Kim Jong-un was a "most serious and grave" threat, before the two leaders agreed to request an immediate emergency meeting of the United Nations security council to "increase the pressure towards North Korea."

South Korea held a bombing drill at 0130 BST where it dropped eight one-ton MK-84 bombs on a shooting range from F-15K fighter planes to test its "capability to destroy the North Korean leadership" in case of an emergency.

The launch took place just three days after the rogue nation fired three short range ballistic missiles, one of which failed, from the Kangwon province that landed in the waters off the Korean Peninsula.

Coming a day after Northern Viper military drills between the United States and Japan on Hokkaido had ended, the launch was seen by analysts as an attempt to drive a wedge between the US and its regional allies.

The ongoing Ulchi Freedom Guardian exercises between US and South Korean forces, which began on 21 August are logistic and defensive in nature, even though Pyongyang has considered them an act of provocation.

The Northern Viper drills on the other hand were considered more operational according to Adam Mount, a senior fellow at the Centre for American Progress.

Beijing pleaded for restraint from all sides to avoid provocations as Hua Chunying, spokeswoman for China's foreign ministry, called for the North to suspend its missile tests in return for a cessation of the joint US-South Korean exercises.

The situation is "now at a tipping point approaching crisis," Hua told a briefing.

"The facts have proven that pressure and sanctions cannot fundamentally solve the issue," said Hua, referring to recent sanctions signed by China and Russia against the DPRK.

Washington said it would look to force international banks that do business with Pyongyang to choose between bankruptcy and a freeze of their North Korean accounts to shut down the Hermit Kingdom's access to liquid assets.

Commenting on recent events around the North Korean peninsula, analysts at Danske Bank said: "Eventually there is only a diplomatic solution to this as a military conflict would entail severe losses on both sides. But the road there will not be easy and we are likely to see continued waves of escalations before the parties are ultimately pushed to the negotiating table."

Dow Jones industrial average futures dropped 100 points following the news. The US dollar fell 0.5% against the yen.