VIENNA - The UN nuclear watchdog said it has seen releases of steam and water indicating that North Korea may be operating a reactor, in the latest update on a plant that experts say could make plutonium for atomic bombs. North Korea announced in April of last year that it would revive its aged five-megawatt research reactor at the Yongbyon nuclear complex, saying it was seeking a deterrent capacity. The isolated and poverty-stricken state defends its nuclear program as a 'treasured sword' to counter what it sees as US-led hostility. North Korea's nuclear program 'remains a matter of serious concern', the International Atomic Energy Agency (IAEA) said in an annual report posted on the UN agency's website. The Vienna-based IAEA continued to monitor developments at Yongbyon through satellite imagery, it said.