Japanese Yen Falls on Optimism for US-China Negotiations

The Japanese yen fell against other major currencies today as the mood on markets was generally optimistic, giving little incentive for traders to buy safer currencies. Domestic macroeconomic data was not helping the yen either, being disappointing for the most part.
The Bank of Japan reported that total lending by banks increased 2.0% in September from the previous year. That was a bit smaller increase compared with the previous month’s 2.1% gain, and economists were expecting the same result in September.
Japan’s Cabinet Office reported that core machinery orders dropped by 2.4% in August from the previous month. While it was a better result than the drop of 6.6% in July, the actual reading was noticeably worse than market expectations of no change.
According to another report from the BoJ, the Producer Price Index fell 1.1% in September, year-on-year, in line with expectations. That was a bigger drop than 0.9% posted in August. Month-on-month, the index was unchanged.
Market participants seem hopeful for the Sino-US trade negotiations. Chinese Vice Premier Liu He said:

The Chinese side has come with great sincerity and is willing to make serious exchanges with the U.S. on issues of common concern. China is willing to reach consensus with the US through this round of consultations on issues of mutual concern to prevent further escalation and spread of friction.

Yet there were also reports that China is not willing concession in the most important issues, like intellectual property theft, meaning that the talks can easily end in yet another deadlock.
USD/JPY advanced from 107.47 to 107.87 as of 18:15 GMT today, bouncing from the daily low of 107.03. EUR/JPY jumped from 117.89 to 118.82. GBP/JPY soared from 131.16 to 134.12.

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