The South Korean news agency, Yonhap, reports the latest statement released by the South’s Foreign Ministry, citing that Japan is highly likely to pass a bill later this week to remove S. Korea from its "whitelist" of trusted trade partners.

The statement read: "The bill is expected to be passed at a Cabinet meeting and undergo procedures ... before it comes into effect in late August."

Additional Headlines:

Will continue to call for Tokyo to resolve the matter through diplomacy and also urge the neighboring country to withdraw all the measures against Seoul.

Plans to deliver a message to Tokyo highlighting the unfairness of its move to exclude Seoul from the whitelist and expressing deep regret, if it approves the bill.

Meanwhile, Diplomatic sources predict Foreign Minister Kang Kyung-wha and her Japanese counterpart Taro Kono could hold talks either on Aug 1 or 2, on the sidelines of the ASEAN Regional Forum to be held in Thailand later this week.

The USD/JPY pair trades almost unchanged around 108.80 levels, reversing an uptick to 108.94 amid risk-on, ahead of the BOJ decision and trade talks.