Not depressed by the Eurozone’s hardstand, the UK is moving forward towards its first post-Brexit trade deal with Japan, as per The Sun. The news relied on the insider sources to No10 while terming the likely deal as EU++.
Key quotes
“Japanese Prime Minister Shinzo Abe’s aides have told No10 he wants a deal as soon as possible, with an insider saying it will break new ground on the digital and financial services sectors.”
“The Cabinet’s high powered EU Exit Strategy (XS) Committee met in No10 to thrash out key details of Britain’s trade negotiations plan for 2020, including ‘most favored nation’ tariffs.”
“It will really help to show Brussels as well as the rest of the world we’re ready to go.”
“Chaired by the PM, the committee of the Cabinet’s most senior ministers also agreed to prioritize four countries in total for early trade deals – known as Tier One – as well as the EU.”
“They are Japan, the US, Australia and New Zealand, and negotiations on all are expected to begin by the Spring.”
“Other countries where deals are expected to take longer have been bracketed as Tier Two, and include Canada.”
“The XS committee meets again next Thursday to thrash out tricky details of the negotiations, such as how flexible the UK is prepared to be on agricultural products.”
FX implications
The news should actually help the USD/JPY and GBP/USD with its likely positive impact on the market’s risk-tone as well as for the UK. While the USD/JPY is matching the expectations by taking the bids to 109.60, the GBP/USD pair seems to have been negatively affected by the US dollar strength as declining to 1.3120 by the press time of early Friday in Asia.
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