For most of the week, it was a big snoozefest for financial markets ahead of the anticipated Jackson Hole Symposium event this weekend. But that all changed on Friday as the U.S.-China trade war snapped back to the forefront with fresh tariffs from China and a risk crushing response from U.S. President Donald Trump.
Japanese Headlines and Economic data
- A small bounce higher in the Japanese yen during the London trading session. No direct catalysts seems to be attributable, so it’s possibly on Brexit drama sparking risk aversion sentiment (Donald Tusk rejects Boris Johnson request to remove backstop)
- Japan’s July core inflation hovers at two-year low, adds pressure on BOJ
- Risk aversion sentiment picked up steam during early morning U.S. session to lift the yen, after news that China will retaliate with tariffs on $75 billion worth of US goods and resume auto duties, and then fear went into overdrive after Trump ordered US companies to look for ‘alternative to China’ in tweet. The Japanese yen popped higher quickly to nearly finish in the green against all of the major currencies.