The Japanese yen rose against other major currencies today amid growing skepticism about chances for a trade deal between the United States and China. Japan’s trade balance failed to meet expectations but that had hardly any noticeable impact on the yen.
Japan’s Ministry of Finance reported that the trade balance recorded a deficit of âÂ¥0.3 trillion in October. While it was a smaller deficit than âÂ¥0.6 trillion registered in September, the reading was far worse than analysts’ forecasts of a surplus of âÂ¥0.26 trillion.
Markets shifted into a more cautious mode after reports that the USA and China have trouble finding consensus. The United States want the Asian country to buy a specific amount of US agricultural products, while China does not want to commit to any specific figure, preferring that its purchases would be driven by market supply and demand. Meanwhile, China wants the USA to roll back tariffs on Chinese goods introduced earlier. US President Donald Trump threatened to increase tariffs even further if the deal is not reached, saying:
If we don’t make a deal with China, I’ll just raise the tariffs even higher
United States Secretary of Commerce Wilbur Ross stated that the Trump is OK whether the deal is reached or not, saying about the tariffs:
He likes the tariffs we’re collecting. It hasn’t hurt import prices — they’re actually down from a year ago — it hasn’t hurt consumer spending, so it doesn’t bother us.
At the same time, he stated that hope for an agreement remains, explaining:
If our negotiators felt there was no hope, they would have stopped.
USD/JPY was flat at 108.54 as of 13:31 GMT today after falling to the daily low of 108.34 earlier. EUR/JPY declined from 120.23 to 119.99. GBP/JPY fell from 140.24 to 139.96.
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