In the latest round in the currency wars, South Korea has apparently called a truce.
Seoul was expected to raise interest rates on Thursday, but did not.
That should keep overseas investors from moving their money into South Korea seeking better returns.
Seoul has been regularly intervening on the foreign exchange markets to lower the value of its currency – the won.
The lack of interest rate increase will please Tokyo.
On Wednesday, Japan’s Finance Minister Yoshihiko Noda said that South Korea’s regular intervention to curb the won called into question the country’s ability to lead the upcoming G20 gathering in Seoul next month.
Noda also criticised China saying it, as well as South Korea, should allow its currency – the yuan – to be more flexible.
The next currency war flashpoint will be on Friday, when the US Treasury Department is expected to make its semi-annual ruling on whether China is deliberately manipulating its exchange rate in order to boost its exports.