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Daiwa Capital Markets analysts point out that the expectations for a US-China trade agreement have caused risk-on yen depreciation.

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“Amid media reports that a trade deal may be signed at the US-China summit meeting around 27 March, expectations for a quick removal of US tariffs on Chinese goods may rein in yen appreciation until the details of the agreement are clarified.”

“However, the US is likely to be cautious about cutting tariffs on Chinese items. For ex, if they agree with starting to consider phased tariff cuts at semi-annual meetings at the ministerial level alongside verification of China honouring its pledge, this would create reactionary moves against expectations for quick tariff removal, which may weaken pressure on risk-on yen depreciation.”