- China’s Liu He expresses willingness to solve trade issues via negotiations, weakening the bid tone around safe havens.
- USD/JPY jumps 55 pips in just five minutes to a hit a session high of 105.80.
The bid tone around the Japanese Yen weakened, allowing a quick 55 pip jump in the USD/JPY pair after China’s Vice Premier Liu He said China is willing to resolve trade issues with the US via claim negotiations.
The USD/JPY jumped 55 pips to a session high of 105.80 in the five minutes to 02:50 UTC and was last seen trading at 105.47.
Liu’s comments come three days after the US President Trump announced that the US will hike the levy imposed on $250 billion of Chinese goods from the current 25% to 30%, starting from Oct. 1. Further, the remaining $300 billion worth of Chinese goods will be taxed at 15% starting from Sept. 1.
President Trump’s decision to hike tariffs was preceded by China’s decision to impose retaliatory additional 10 percent tariffs on $75 billion worth of US exports.
The tit-for-tat trade war rocked markets in the early Asian session. The futures on the S&P 500 fell more than 1 percent, pushing the anti-risk JPY higher across the board. As a result, the pair had dropped to a low of 104.47 earlier today.
Looking forward, the pair could extend the recovery rally if President Trump responds to Liu He’s comments by softening his stance on trade.
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