Is the Yuan in China’s Trade-War Arsenal?

The new central banker says Beijing won’t use depreciation as a weapon—but that doesn’t mean the yuan won’t depreciate

China’s new top central banker says Beijing won’t use yuan depreciation as a weapon in a trade fight. Should investors believe him?

A sharp, deliberate devaluation—as in 2015—would be risky, given the country’s rickety financial system. But there is reason to think the currency might come under pressure later in 2018 anyway, and that could be misinterpreted as provocation by a hostile Trump administration.

The...