One week high in USD/JPY

One week high in USD/JPY

USD/JPY is at a one-week high, up 35 pips to 107.85. The gains come as Treasury yields and US equities rally on reports that US and Chinese officials are talking about a partial deal that would delay tariffs for agricultural purchases and some token pledges on currency.

That's not what anyone was hoping for a few weeks ago but it's a sign that the US is blinking and that Trump doesn't want to endanger his election chances by escalating the conflict. That's a reasonable take.

In the latest news, Trump teased a meeting with Lui He tomorrow via twitter:

Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.

So to answer his question: He takes the deal. Why? He's surely already heard what China is bringing and he's still listening. The message here is that Trump has heard what China is bringing and he's not walking away from the table so he's probably going to try and push a little harder and then he will take what's available.