MUFG Research sees a scope for further USD/JPY gains towards 110 on a formal announcement of Phase-1 trade deal.
"The deal is somewhat more positive than expected – not only does it avert the tariffs that were scheduled to be ratcheted up on the 15th of December but the Trump administration has offered to pare back roughly half of the existing tariffs on around USD360 billion of Chinese imports into the US. These are expected to be announced officially today. In return, the deal will see China buy USD50 billion worth of agricultural goods in 2020 from the US," MUFG notes.
"It is important to note that official announcement of the deal, which is expected today, is still forthcoming and that the Chinese state and media have been relatively mute on the matter. A formal announcement and then indication of acceptance from China could see USD/JPY head further towards the 110.00-level," MUFG adds.