Emergency Declarations Loom Large

USD/JPY had a look below its 50-DMA/Y108.00 mark early doors Tuesday, but shook off its weakness and recovered over the Tokyo fix, possibly on the back of Gotobi day flows. The pair remained elevated through the better part of the London session, before erasing all gains into the WMR fix.

• Tokyo metropolitan authorities filed a request with the central gov't to declare a state of emergency in the capital, following a similar move from Osaka. Plans to seek emergency declarations had been heavily reported in the local news and several gov't officials pledge to process the requests without delay. Sankei suggested that the gov't will declare emergency in Tokyo, Osaka & Hyogo as soon as this week.
• Speculation that Japan might be forced to consider cancelling the Tokyo Olympics continues to do the rounds, with ex-FinMin Azumi suggesting as much in an interview yesterday. The IOC will hear an update from the organisers of the Games on preparations for the event.
• Per the Nikkei, Japan will receive another 50mn doses of the Pfizer jab by the end of September. The news follow last weekend's phone call between PM Suga & Pfizer CEO.
• Local equity markets grabbed attention Tuesday, as the BoJ refrained from buying ETFs even as the Topix fell 1.2% before lunch break. BBG calculated that it was the first time since at least 2016 when Japan's central bank didn't buy ETFs after the Topix registered a >1% decline in the morning session.
• There are no tier 1 risk events in Japan today, with focus already on Friday's CPI & flash Jibun Bank PMIs.
• The rate last trades flat at Y108.11, with bears looking for a dip through the 38.2% retracement of the Jan - Mar rally at Y107.77. Below there opens trendline support at Y107.64. Bulls look for a move through the 20-EMA at Y109.02.