Golden Week Gets Underway

USD/JPY round tripped from Y109.08, as post-FOMC greenback sales negated the pair's earlier strength. USD took a hit as Fed Chair Powell continued to downplay potential for tapering anytime soon until "substantial" further progress was made.

• Gov't sources told Kyodo Wednesday that Japan will introduce "vaccine passports" for international travel, likely in the form of a mobile app.
• Organisers of the Tokyo Olympics tightened safety guidelines for athletes and will require them to take daily coronavirus tests. The decision on allowing domestic spectators will be made in June.
• The Golden Week has began with Japanese markets shut for the Showa Day today. They technically re-open tomorrow, but expect local liquidity to be thinned out at least through May 5, as many local participants take Friday off.
• That said, Friday will witness a major data dump, which includes unemployment, Tokyo CPI, flash industrial output, final Jibun Bank M'fing PMI, housing starts & consumer confidence.
• USD/JPY trades flat at Y108.58, with bulls looking for a break above the 50% retracement of the Mar 31 - Apr 23 sell-off at Y109.23. Above there opens Apr 9 high of Y109.96. Bearish focus falls on Apr 27 low of Y108.08, followed by key-near term support at Y107.48, the low print of Apr 23.