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Responding to Japan’s removal of South Korea from the preferred trade status taking effect today, the South Korean Deputy National Security Adviser Kim Hyun-chong said Japan’s decision is deeply regrettable.

Key Quotes:

South Korea may reverse a decision to scrap an intelligence-sharing pact with Japan if Tokyo corrected what he called “unjust measures”.

I want to stress the ball is in Japan’s court.  

Amid US-China trade uncertainty and US yield curve inversion, markets seem to overlook the Japan- South Korea trade spat. Therefore, the above comments appear to have no impact on the market sentiment, with USD/JPY still wavering below the 106 handle, supported by higher Wall Street futures.