According to Kyosuke Suzuki, director and head of FX and money market sales at the firm's Tokyo branch
Suzuki says that wariness over NAFTA negotiations ahead of the end-March deadline may cap any upside moves in USD/JPY. He argues that as the deadline looms nearer, it may keep the risk-on momentum that we have seen at the start of the week 'temporary'.
With regards to trade, he says that markets are responding favourably to comments by Navarro and China but it's too early to become "unconditionally optimistic" about trade issues.
Though Suzuki mentions that he expects a trade war to be averted and he says that USD/JPY could see some upside next week - with a watchful eye to be kept on developments on the trade front.
Well, to be honest I see NAFTA talks hurting the loonie more than it will the yen - as it has done in the past. But you can't rule out entirely how the negotiations will spillover to other parts of trade. The key focus will be the temporary tariffs exemption deadline which is by 1 May.
Negotiations on NAFTA has carried on for quite some time, so it doesn't really matter if it drags on further. But the key deadline that there has to be some form of agreement will be by 1 May.
That will be the real risk - not just for NAFTA, but for the EU too, but markets seem to be happy to keep that in the back pocket for the time being.
