Covid Case Counts Under Scrutiny, USD/JPY Approaches Round Figure Support

USD/JPY ground higher in Tuesday's Asia-Pac hours, but more than wiped out those gains later in the day. The downswing was driven by the greenback's depreciation, extended after the release of slightly better than expected U.S. CPI data.

• Jiji reported that Japan's central gov't is considering implementing special, quasi-emergency measures in Aichi, Kanagawa, Saitama & Chiba to contain the spread of Covid-19 infections. Meanwhile, Osaka's daily case count topped 1,000 for the first time on Tuesday.
• USD/JPY implied 1-month ATM volatility fell to 5.55% yesterday, the lowest level since mid-Feb. It last sits at 5.68%.
• Spot USD/JPY trades at Y109.03, just shy of neutral levels. The pair rests upon support from Apr 8 low/23.6% retracement of the YtD rally at Y109.00/108.99. A break here would open up Mar 23 low of Y108.41. Bulls look for a rebound above Apr 7 high of Y109.94.
• Japan's core machine orders hit the wires later today. Elsewhere, BoJ Gov Kuroda will address the 96th Trust Companies Assembly. The Governor will speak again, when he attends the branch managers meeting tomorrow.