The US Treasury Secretary and his Japanese counterpart have issued a joint statement reaffirming their commitment to refrain from 'manipulating FX to gain a competitive advantage', Commerzbank's FX analyst Michael Pfister notes.

Yen has hardly reacted to the morning news

"But why is this important? After all, this is a commitment that is regularly reiterated by the G7 countries. On the one hand, the market fears that a JPY appreciation could be used as leverage in negotiations with the US. Although the trade deal has now been concluded, the US regularly makes new demands. Secondly, the Japanese Ministry of Finance does intervene in the foreign exchange market at irregular intervals when officials are unhappy with developments."

"However, little is likely to change. The Japanese finance minister has already emphasised that the statement would not deter Japan from intervening. In recent years, these interventions were intended to strengthen the yen anyway. This is likely to suit the US. However, the ministry is unlikely to intervene as long as the yen does not depreciate significantly again. Therefore, it is not surprising that the yen has hardly reacted to this morning's news."