Barrack Obama has recently made his first statement concerning the disputed Senkaku islands, which currently seem to belong to Japan but are also claimed by China. He also stated that these islands are subject to the security agreement between the US and Japan.
According to this statement, the USA is obliged to help Japan protect its territories. It seems like President Obama hints that the USA will have to respond and take Japan's side in the disputes if China dares intervene in the disputed territory.
Meanwhile, some Asian countries seem to be concerned about the US presence and authority in the region. Luckily for them, Obama thinks that such disputes should be settled in a peaceful and diplomatic way without any armed conflicts leading to major consequences. There should be no intimidation or pressure, he believes. Still, some experts assume that the USA tries to use this situation in order to deter the military power of China.
If to consider the deteriorating relations between China and Japan, any attempt made by Japan to capture those disputed islands will be treated as an act of aggression against China. The Chinese side is already acting so as to undermine the Japanese economy, and there are some consequences already. Chinese are boycotting Japanese products, which is definitely affecting many Japanese exporters, including major auto producers such as Honda Motor Co. and Toyota Motor Corp. These company are already reporting loses caused by a major drop in the Chinese demand for their autos. Indeed, China is one of the biggest trade partners of Japan. As a result, the Japanese export has already declined by 5%.
Yet, China may deteriorate its relations with the USA, which are far from being excellent. The situation may affect the entire global economy, especially if to consider the fact that the disputing sides are the world's 3 biggest economies as well as the fact that China is the USA's biggest trade partner. That is why the USA is urged to clarify its stance over the issue.
Forex
Meanwhile, USDJPY has already started this trading week. The start took place in the form of a consolidation move after a sharp drop last week, Masterforex-V Academy reports. At this point, the closest levels of support are located at 100,74 (February's low) and the MF sloping channel (as shown below):
