FX Action: USD-JPY printed a fresh six-week high
FX Action: USD-JPY printed a fresh six-week high at 108.16 ahead of the London interbank open, since settling back near the 118.0 mark. The price action is similar to yesterday's, with AUD-JPY and GBP-JPY having concurrently posted new six-week peaks, though EUR-JPY has so far failed to surpass the one-month high the cross saw yesterday. The yen's descent comes amid ongoing risk-on conditions in global markets. President Trump provided the latest injection of positivity by announcing that the latest round of tariff increases on Chinese goods imports will be delayed by two weeks. Markets have reacted in pavlovian-style, with stock markets rallying in Asia and S&P 500 futures rising after the cash version of the index closed on Wall Street yesterday with a 0.7% gain, while currencies with high-beta characteristics have outperformed in the forex realm, particularly against the yen in accordance with the inverse correlation the Japanese currency has with global-wide shifts in risk appetite. Trump's concession on the trade front follows the departure of the hawkish U.S. national security advisor John Bolton from the administration and comes amid expectations for stimulus of the fiscal kind in Europe and China, offsetting some recent descaling in expectations for stimulus of the monetary kind by the Fed and ECB. The mood music could change quickly. On the U.S.-China trade front, analysts have many times heard upbeat rhetoric in the many previous rounds of the so-far fruitless trade discussions. For now, the yen's downward bias looks likely to persist.