USD/JPY at two-week high as US, China reach deal

The dollar-yen is proving to be resurgent as US and China announce tariff roll backs.

The USD/JPY is picking up, following positive US-China trade developments.

On Monday 16 December, the major opened at ¥109.336, 0.05% higher than last week’s closing price of ¥109.281.

A day earlier on December 15, China had agreed to suspend planned retaliatory tariffs on certain US agricultural goods and automobiles, as part of its upholding of the phase one trade deal.

This is the highest level in two weeks, after a five-month high of ¥109.611 recorded last month.

The price is set to rise further, according to IG Chief Market Analyst Chris Beauchamp. He wrote that price level is back in the ¥109.55 region that has marked resistance for months, but it looks like further gains toward ¥110.35 can be expected.

Don’t throw caution into the wind, just yet

Despite this turning point, ANZ Bank analysts warned in a Monday morning note that the phase one deal does not completely rule out the possibility of unresolved trade issues resurfacing in the coming year.

They wrote: ‘The US has agreed to halve the tariffs on US$120 billion of Chinese goods (from 15% to 7.5%) but will retain a 25% on US$250 billion of Chinese imports. There have been no indications from the US that there will be a further roll back in tariffs in the future but the 15 December tariffs would not take effect.

‘In exchange, China has agreed to purchase an additional US$16 billion in goods from the US over the next two years, something already agreed in previous trade discussions.’

Meanwhile, Commonwealth Securities senior economist Ryan Felsman noted there were certainly ‘expectations perhaps that the roll back would be more significant than just 50%’, adding that most investors are still awaiting further details.

Learn how to trade Forex with an IG demo account now

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.