Dollar/yen wobbled amid a barrage of news related to trade. NAFTA, China, and Brexit all played a role in rocking the pair. The upcoming week features top-tier figures such as the Non-Farm Payrolls and also new US tariffs on China.
USD/JPY fundamental movers
The week began with optimism related to NAFTA. The US and Mexico reached an accord between them and Canada was set to join. However, intense talks with Canada did not go very far. While negotiations continue, the lack of a deal weighs on sentiment.
US President Donald Trump said he wants tariffs on China as soon as possible and also complained against the EU. His tough stance also caused worries. On the other hand, optimism about a Brexit deal improved the mood.
US GDP was upgraded to 4.2% annualized and the CB Consumer confidence hit the highest levels since the year 2000. On the other hand, yet another housing figure missed expectations.
In Japan, the Tokyo inflation figure surprised to the upside but remains depressed and far below the 2% target the BOJ aims for.
NFP Buildup and a serious escalation in trade
The first week of September starts with a holiday in the US but warms up quickly. The ISM PMI’s and the ADP NFP are set to move markets and also serve as hints to the Non-Farm Payrolls report on Friday. After a disappointing increase in July, a return to normal levels is expected in August. Wage growth is projected to accelerate to 2.8%.
The looming trade war with China is set to steal the headlines. The deadline for public comments on new tariffs ends on September 6th. After hitting China with duties on $50 billion worth of Chinese products, Trump wants to slap levies on an additional $200 billion of goods. China will be unable to retaliate in kind and may include non-tariff measures. The significant escalation will have an effect on other economies as well as the world is much more connected.
See all the main events in the Forex Weekly Outlook
USD/JPY Technical Analysis
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