FXStreet (Guatemala) – Summary: 10% yuan depreciation could have slight negative impact on Japan’s GDP growth.
Key Quotes:
“The People’s Bank of China (PBC) changed the method for determining the yuan exchange rate on 11 August. That decision and subsequent movements have driven down the yuan’s rate against the dollar in the interbank market by 3.0% (through 17 August). Assuming the yuan’s rate against the dollar falls 10% within this year, we estimate Japan’s export volume will decline slightly, import volume will increase slightly, and inbound consumption will decrease 2.0%.”
“This will have a very limited effect on Japan’s GDP growth. However, if other Asian currencies also decline to some extent together with the yuan, we think the effect on Japan’s GDP growth will be slightly negative. In that sense, it will be important to watch movements in Asian currencies.”
(Market News Provided by FXstreet)