USD/JPY moves up to a high of 110.85 before backing off slightly
Price jumped from around 110.62 to a high of 110.85 before backing off to near 110.75 currently after China confirmed that vice premier, Liu He, will be attending trade talks in the US on 9 to 10 May this week.
The spike comes alongside a jump in Treasury yields as well as US equity futures with the latter paring losses of about 0.6% earlier to just under 0.2% currently:
Given that Liu will only be in the US for a short period of time, Thursday will be a crucial date for both sides to try and reconcile things before Trump follows through on his threat that tariffs will kick into effect on Friday.
It’s definitely a make or break event now as China’s gesture of goodwill should be accompanied by some concessions but if that doesn’t prove to be enough on Thursday and we see tariffs come about the next day, expect China to retaliate in due kind.