Yen and Yuan Watch: USD/JPY and USD/CNY Daily — 2026-09-17
The PBOC strengthened the yuan fixing for a fifth consecutive day ahead of the Trump-Xi summit, setting the USD/CNY reference rate at 6.7580. Meanwhile, the yen's recent appreciation has triggered a shift in global carry-trade flows, with investors increasingly looking to the yuan and Canadian dollar as alternative funding currencies.
Yen and Yuan Watch: USD/JPY and USD/CNY Daily — 2026-09-17
Top developments
PBOC Strengthens Yuan Fixing Ahead of Summit
China’s central bank set the USD/CNY central parity rate at 6.7580 for Thursday’s session, marking a fifth straight day of strengthening and signaling a desire to offset recent dollar gains ahead of President Xi Jinping’s summit with Donald Trump. The fixing was stronger than the previous session’s rate of 6.7628, reflecting Beijing's intent to manage currency volatility during high-stakes diplomatic engagements. This move aligns with broader efforts to stabilize the yuan against the dollar while maintaining export competitiveness.
Carry-Trade Flows Shift from Yen to Yuan and CAD
As the yen appreciated approximately 6% against the dollar since late July, its status as the premier low-yield funding currency has weakened, prompting investors to seek alternatives. Strategists note that the Chinese yuan and Canadian dollar are emerging as new candidates for carry-trade funding due to shifting rate expectations and volatility profiles. This reallocation of capital flows could reduce downward pressure on the yen while introducing new dynamics into USD/CNY and USD/JPY correlations.
PBoC Signals Acceptance of Slower Credit Growth
Commerzbank research highlights that PBoC Governor Pan Gongsheng has framed weaker loan growth as part of China's structural economic upgrading rather than a sign of distress. This stance signals that no imminent credit-driven stimulus is planned, which may support the yuan by reducing fears of excessive monetary easing that could devalue the currency. The market is interpreting this as a long-term commitment to quality over quantity in economic growth, stabilizing CNH expectations.
Yen Rally Tops Intervention Levels
The yen strengthened to its highest level since February, surpassing the peak reached after the coordinated intervention by Japan and the US in late July. This rally has raised concerns among global equity strategists about a potential unwind of the yen carry trade, which could dent the rally in global stocks if forced liquidations occur. The Ministry of Finance and BoJ are likely monitoring these flows closely to ensure the appreciation does not trigger disorderly market conditions.
Local view
Shanghai Clearing House Expands Yuan Clearing Local financial infrastructure is advancing RMB internationalization, with the Shanghai Clearing House beginning CCP clearing for yuan spot pairs with SGD, NZD, and THB. Fees are waived through 2028 to boost RMB usage in Belt & Road trade corridors, indicating a structural push to deepen offshore liquidity pools beyond major G10 currencies.
Domestic Media Focus on Fed Rate Hike Impact Chinese financial media outlets like Smzdm are analyzing the impact of the recent US Federal Reserve rate hike (back to 3.75%-4.00%) on retail exchange rates. Reports highlight that despite the Fed hike strengthening the dollar index, the PBOC's firm fixing helped keep the onshore yuan relatively stable, offering a buffer for domestic travelers planning National Day holidays abroad.
Context & numbers
- USD/CNY Fixing: Set at 6.7580 on Sept 17, stronger than the previous day's 6.7628.
- Onshore CNY Spot: Closed near 6.7112 on Sept 16, depreciating slightly by 27 basis points from the previous week's close, showing divergence between the managed fixing and market spot rates.
- Yen Performance: The yen has appreciated ~6% against the dollar since late July, making it the best-performing G10 currency over this period.
- Fed Policy: The US Federal Reserve recently raised rates by 25 basis points, returning the federal funds rate to 3.75%–4.00%, the first hike since July 2023.
On the radar
- Trump-Xi Summit: Scheduled for later this month; currency markets remain sensitive to any pre-summit diplomatic rhetoric or policy announcements from Beijing or Washington.
- Carry Trade Unwind Risks: Monitor global equity volatility for signs of forced deleveraging in yen-funded positions, which could cause sharp, short-term moves in USD/JPY.
- MoF Intervention Data: Look for updated monthly foreign exchange intervention data from Japan's Ministry of Finance to assess the scale of recent defensive actions and their sustainability.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
Powered by
