Another Month, Another State Of Emergency

USD/JPY has stuck to a tight range this morning, after moving away from a 10-day low on the last trading day of last week. The yen was the second best performer in G10 FX space in July, after its safe haven peer CHF.

• Another Covid-19 state of emergency takes effect in Chiba, Saitama, Kanagawa and Osaka today and will last until the end of August, following a rapid increase in new cases last week. PM Suga confirmed the emergency declaration Friday, noting that officials want this to be the last state of emergency. He said that the recent upsurge in cases is driven by the Delta variant and not linked to the spectatorless Olympic Games.
• The Nikkei reported that Japan is considering administering third doses of Covid-19 vaccine next year, while Pfizer mulls launching a trial of its oral Covid-19 drug in the country. PM Suga's government has been criticised for a slow vaccine rollout, with Japan having the lowest proportion of fully vaccinated citizens in G7.
• Final Jibun Bank M'fing PMI & consumer confidence take focus on the data front today. Later this week, focus turns to Tokyo CPI (Tuesday) and earnings/spending data (Friday).
• USD/JPY last seen at Y109.71, virtually unchanged on the day. Topside technical focus falls on Jul 23 high of Y110.59 and a breach of that level would open up Jul 14 high of Y110.70. Conversely, losses past Friday's trough at Y109.36 would clear the way to Jul 19 low of Y109.07.