The decision by the Japanese authorities to criticise currency manipulation by Seoul must have come as some relief in the US, which has to make a tricky decision about whether to escalate similar confrontation with China.

The twice-yearly Treasury currency report, in which the US has to decide whether or not formally to name China as a manipulator, is due to be released by Friday. The widespread belief in Washington is that the Treasury will once again refrain from using the label. Tim Geithner, Treasury secretary, has repeatedly underlined in public the limited gains from thus naming Beijing. The report’s only sanction is to start negotiations with the Chinese authorities, which Mr Geithner is already doing.

With China at least allowing the renminbi to float up slightly since September, there seems little more the US is prepared to do for the moment than continue to pursue the issue multilaterally – the next opportunity being at next month’s G20 leaders’ meeting in Seoul.