Koreas Agree to End Standoff

North Korea agreed to lift its “semi-state of war” with South Korea at the same time as the South halts propaganda broadcasts across their shared border, ending the standoff that has roiled financial markets in Seoul.

Marathon talks ended finally in agreement, North Korea’s official Korean Central News Agency reported, echoing televised remarks moments earlier by South Korea’s presidential security adviser Kim Kwan Jin. The two sides will seek to resume the reunions of families separated by the Korean War, while North Korea expressed its regret over the Aug. 4 mine explosions which maimed two South Korean soldiers.

The two countries will also hold government-level talks in the near future in either Seoul or Pyongyang, Kim said.

Negotiations at the border village of Panmunjom had stretched for more than 43 hours, spread over about three days, and coincided with the mobilization of forces on both sides. The two sides exchanged fire across the border on Thursday, South Korea said, though North Korea denied it fired.

South Korean President Park Geun Hye said Monday she would “never back off” in the military standoff and that she would seek a clear apology from North Korea over the mine explosions. North Korea also earlier denied setting the devices.

The uneasy 62-year truce since the end of the Korean War is periodically disrupted by exchanges of fire that peter out without escalating, though North Korean leader Kim Jong Un’s relative inexperience and the unpredictable nature of his regime have often kept tensions high.

The standoff exacerbated the turmoil in South Korea’s financial markets, triggering a market sell-off that sent the Korean won to a four-year low and drained more than $900 million from Korean equities in a week.