【Ripples from U.S.-China Tariff Talks: USD/JPY in a Tug of War】
— Theme: “End of Correction and the Resumption of Risk-On” —
■ Market Overview: Signs of Exhaustion Prompt a Period of Adjustment
📌 Key Moves in the First Half of the Week:
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USD/JPY climbed to the upper 148 yen range early in the week but later softened below 145.
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Reports of a “90-day tariff freeze” in U.S.–China trade talks were initially a driver, but follow-through momentum was limited.
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Volatile price swings persisted throughout the week, with no clear directional bias.
→ After the temporary positive sentiment faded, markets adopted a more cautious tone.
■ Core Market Theme: “Trade Talk Progress vs. Currency Policy Pressure in Asia”
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The U.S.–China tariff agreement has strong political implications, but practical negotiations are still underway behind the scenes.
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U.K.–U.S. trade discussions made some progress, while negotiations with other countries remain stalled.
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The recent strength in the Taiwanese dollar and South Korean won has added instability to the Japanese yen’s position.
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Growing speculation suggests increased pressure for “currency stabilization” across Asian FX markets.
→ Markets remain sensitive to trade headlines and potential currency intervention signals.
■ Key Economic Events & Data Releases (from NY time onward)
📊 Upcoming Highlights:
| Indicator/Event | Notes |
|---|---|
| Hong Kong Q1 GDP (Final) | Watch for revisions to quarterly growth |
| Eurozone Trade Balance (Mar) | Gauging recovery led by German exports |
| Canada International Securities Transactions (Mar) | Insight into foreign capital inflows |
| U.S. Housing Starts (Apr) | Measuring housing demand and rate impact |
| U.S. Import Price Index (Apr) | Important for inflation trend validation |
| U.S. Michigan Consumer Sentiment (May, preliminary) | Forecast: 53.5 (prior: 52.2) |
| U.S. TIC Net Long-Term Flows (Mar) | Reflects demand for U.S. bonds and USD |
💬 Key Central Bank Speakers:
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SNB Vice Chairman Schlegel
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BoE Deputy Governor Lombardelli
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ECB Chief Economist Lane
→ Remarks from central bank officials may add to market volatility.
■ Trade Strategy: Selective Long Plays Amid Signs of Stabilization
📌 Focus Assets and Strategic Outlook:
| Asset | Current Trend | Strategic Outlook |
|---|---|---|
| USD/JPY | Selling pressure easing | Support seen near 145; cautiously bullish for short-term rebounds |
| USD/CHF | Holding firm | Maintain neutral-to-bullish bias; monitor move toward 0.91 |
| BTC/USD | Stabilizing | Symbol of risk-on return; dip-buying favored |
| U.S. Stocks (S&P500) | Testing rebound | Inflation data could be the next turning point |
■ Key Watchpoints Going Forward
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Concrete developments in U.S.–China tariff negotiations
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Shifts in Asian currency policies (notably Korea & Taiwan)
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Durability of U.S. consumer sentiment and broader market impact
→ Any weekend surprises in economic data or news could spark a renewed wave of risk-on sentiment into next week.
