The Yen again experienced a yen in the starting date of this week. The yen strengthened almost against all currency pairs. This was triggered by market concerns about the possibility of trade war excalation between America and China. Earlier in the week President Trump issued that he would again raise tariffs on import from China.
The administration of US President is expected to declare the extra tariffs on—more or less—300 billion dollars’ worth of Chinese items on Monday. This is another follow up after their last move on Friday when the US dramatically increased the tariff rate on $200 billion worth of Chinese imports, a move intended to punish Beijing for making inversions on past exchange duties.
This statement was responded to by the Chinese Government with the possibility of implementing the same action as an attempt to counterattack.
China’s foreign minister fired back as of revealed that China would not be subject to any pressure from any foreign countries, “won’t be surrender to external pressure.” This is a firm answer to Trump’s statement that China did not respects the agreement between both parties. Previously, Trump issued a threat that China shall not worsen the situation through its trade political moves.
“China should not retaliate-will only get worse!” quoted from Trump’s Twitter. He added that China have to make a deal otherwise they will be hurt badly
As is known before, China withdrew from the agreement to impose international trade rates between the two countries because they were not satisfied with the American proposal.
The Yen is by then the Save Heaven Asset Choice
Market concerns about the increasingly uncertain relationship between the two countries have had a positive impact on the Yen. The market seems to be in droves to shift funds to more stable financial instruments, in this case Yen. The market considers that the Yen is strong enough to not be affected by the influence of trade war between China and America.
Until the end of the New York trading session, the Yen was still monitored to strengthen against the major pair, each of them as much as:
USD 96 pips
GBP 183 pips
EUR 104 pips
Note : (the figures might be different among brokers)
However, given the strengthening of the Yen has been going on for quite a long time, we must be careful of the correction and the possibility of profit taking from market participants. In the range of the next 1-2 days, there is a possibility that the Yen will experience consolidation.