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Forex Today: Japan & USA Announce Big Trade Deal, 15% Tariff

By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked with...

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The Japanese Nikkei 225 stock market index rose very strongly today to close at a new 1-year high following news of a trade deal with the USA at a relatively low tariff rate and PM Ishida's pending resignation.

  1. Market news has continued to focus on Japan as a very large trade deal is announced with the USA. US tariffs on Japanese auto imports will be set at a relatively low rate of 15%. According to President Trump, Japan has committed to invest $550 billion in the USA as part of the deal. Japanese PM Ishida, already badly wounded by his government's loss of control of the upper house of the Japanese Parliament last weekend, has committed to resign, but wants to finalise all the details of the trade deal first. The news of the trade deal pushed the Japanese Nikkei 225 Index strongly higher to close at a new 1-year high, so trend traders might be interested to take a long position here. The Japanese Yen is currently weakening mildly.
  2. The broad US stock market Index the S&P 500 closed at a new all-time high yesterday for the third consecutive day. Trend traders are interested to be long here, but it is worth noting that the bullish moves have been relatively small. The tech-based NASDAQ 100 Index, which tends to outperform the S&P 500, is currently performing worse and not breaking to new highs.
  3. Precious metals are looking more bullish, with Gold rising again over the past day to get quite close to its record high, and very close to its record high closing price. Silver has performed even better, rising strongly yesterday to reach a new 13-year high and looking set for more advances with $40 per ounce in sight. Trend traders will be interested to be long of these precious metals, and may also be long of Palladium and Platinum, which are both showing bullish price action and trading near their respective long-term highs.
  4. Copper is trading near its all-time high price and looks set to rise further.
  5. In the Forex market, the New Zealand Dollar has been the strongest major currency since the Tokyo open, while the Swiss Franc has been the weakest. The EUR/USD currency pair remains within a valid long-term bullish trend and will attract renewed interest on the long side as it traded above $1.1750 yesterday after starting to rise again three days ago.

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

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