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In a day when fears about escalating trade and currency wars (and the PBOC's first imminent yuan fixing below 7.00 tonight) and panicking central banks sent global bond yields to near record lows, there was some positive news involving one of the parallel trade wars that has been taking place in the Pacific Rim periphery of the main event between the US and China.
Specifically, the Nikkei reported that the Japanese government is set to approve some exports of semiconductor materials to South Korea, potentially a minor but notable detente in the recent trade feud between the two countries, and the first such approval since Tokyo tightened export controls on the products in July.
Ministry - Economy - Trade - Industry - Review
The Ministry of Economy, Trade and Industry determined after a review that there is no risk the shipments will be used for military equipment. Despite the additional bureaucratic hoops exporters must now jump through, the resumption of shipments may mean South Korea's semiconductor production will not be severely affected.
According to the Nikkei, the ministry is likely to announce the approvals as soon as Thursday, however, "officials are not expected to give details about the shipments or orders as the information is confidential."
Reminder - Month - July - Prime - Minister
As a reminder, over a month ago, on July 4 Japanese Prime Minister Shinzo Abe decided to require government approval for each shipment of key materials - such as fluorinated polyimide, which is used in smartphone displays, and resists and hydrogen fluoride, used to make semiconductors - to South Korea as part of a sudden reversal in trade policies between the two export-reliant nations. Previously, companies could obtain comprehensive approval that allowed them to export without screenings of individual shipments, for a set period.
The amount of paperwork involved is significant. For resists and fluorinated polyimides, the process involves submitting seven different documents, including technical details about the...
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