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