Koreas exchange fire near sea border

North and South Korea on Wednesday exchanged what appeared to be artillery fire near a disputed sea border with the South, off the west coast of the peninsula, Yonhap news agency reported government officials as saying.

South Korea's presidential Blue House said both sides were firing into the air and there were no casualties, according to Yonhap. It has called a meeting of top national security officials.

The rare exchange of fire rattled markets, with Seoul's main stock exchange extending losses, and the won wiping out early gains against the dollar.

North Korea on Tuesday declared a no-sail zone in the Yellow Sea waters in a sign that it might fire artillery or short-range missiles, media reports said.

South Korea's office of the Joint Chiefs of Staff could not immediately confirm the reports.

The area is near a contested sea border between the rival Koreas that was the site of a brief naval clash in November between the states, which are technically still at war.

A South Korean ship was pockmarked with bullet holes, and a North Korean vessel limped back to port in flames after the firefight.

About a month before the clash, North Korea raised regional security concerns by firing short-range missiles off its east coast.

Destitute North Korea in recent weeks has signalled that it is ready to reduce the security threat it poses in North Asia by saying it could end its year-long boycott of international nuclear disarmament talks.

Analysts said the latest moves may be an attempt by Pyongyang to increase its leverage, and win concessions to lure it back to the table in the disarmament-for-aid talks among the two Koreas, China, Japan, Russia and the United States.