President Trump said that Japan and the US have reached a trade agreement in principle at the G-7. The deal could be signed at the UN General Assembly and notably auto tariffs on japan will remain the same.
The trade balance for Japan in December came in as a much bigger deficit than expected at Y-55.3bn versus an expected Y-42.3bn, exports fell sharply as the trade wars bit, exports to China fell 7% y/y while they rose 1.6% to the U.S.
Australian Newcastle spot thermal coal prices hit $120 for the first time since 2012 this week. Asian countries continuing strong consumption and spot market buying by Japanese utilities to meet demand through the rest of 2018 are pushing prices higher.
On the sidelines of the Group of 20 foreign ministers Japan and Australia reiterated that they are to put TPP into effect at an early date. The next day the EU said it welcomes green light to start trade negotiations with Australia and New Zealand.
The Australian dollar has been under pressure since the U.S. China trade tit for tat but there are more importers than China for Australia. Australian mining companies are seen locking in the highest Japan coal deal since 2012.