North Korea's latest missile launch is likely to increase the chances of it test-firing an intercontinental ballistic missile (ICBM) within a year, according to a report by the Seoul-based Institute of National Security Strategy (INSS).

It said the launch is probably aimed at showing off the country's confidence that it will be able to conduct another test-launch soon.

However, Kim Jong-un's regime might refrain from launching an ICBM in March as was expected earlier because South Korea and the US could step up the surveillance of Pyongyang when they hold a joint annual military exercise around that time.

Instead, the next provocation could possibly take place sometime during a probable summit between US and Chinese leaders, the report said.

"There is a high possibility that it could fire off an ICBM if China faithfully implements UN sanctions and cooperates with Washington over the North Korean issue," it added.

The North might launch the ICBM from an inland location near the Chinese border such as Panghyon, in a bid to avoid possible interception by the US, the report said.

The INSS report comes days after North Korea fired a new intermediate-range ballistic missile called Pukguksong-2. The missile reached an altitude of 550km and flew about 500km before plunging into the sea off the east coast of the Korean peninsula.

South Korea's intelligence service said the missile had a range of more than 2,000km (1,243 miles).

The recent launch came after Kim said in his New Year's speech that his country had entered the final stage of preparations to test-launch an ICBM.

IRBM North Korea
A view of the test-fire of Pukguksong-2 guided by North Korean leader Kim Jong Un on the spot, in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on 13 February, 2017KCNA/Handout via Reuters