China declares war on Trump? [From YEN Kura’s email newsletter]
From the real-time investment newsletter "Real Top Trading" by YEN Kura-san provided by GogoJungle, here is today’s distribution.
At 9 o'clock, the CTA pushed around the dollar/yen near 106.40 and fell to around 105.80.
As usual, hedge funds are triggering risk-off effects of yen appreciation and stocks decline, accelerating yen strength and stock weakness.
While the Shanghai Composite is down 0.95%, the Nikkei Average has fallen by 1.8%. More disastrous is the KOSPI at −2.47%.
What’s different from the usual hedge fund moves is that the yuan and the Korean won have fallen sharply.
There are risks of stock and currency outflows and capital flight.
Domestic yuan is 7.0266 per dollar, down 1.4%, exceeding 7 for the first time since May 9, 2008. Offshore yuan (traded in Hong Kong) is 7.1094, an all-time low.
The fact that intervention was not made and 7 yuan was breached so easily is likely pressure on the U.S.
If this continues, the U.S.–China trade war may enter a new phase involving currency depreciation.
As a result, the yen could be hit and strengthen further.
Even if it stops in the 105 yen range this time, I would like to adopt a selling-on-rallies stance.
From YEN Kura’s Real-time Newsletter “Real Top Trading” (Takeshi Tashiro)Quoted.
It seems that yuan depreciation is becoming a new baseline due to the U.S.–China trade war. As YEN Kura has noted, this could accelerate yen appreciation, and the likelihood that the yen will remain in a strengthening trend appears high. (Editorial Department)
