Japan To Decide On Extending Covid-19 State Of Emergency

USD/JPY rallied Thursday as participants digested rumours surrounding potential extension to Japan's Covid-19 state of emergency, better than expected U.S. jobless claims data & speculation re: U.S. Pres Biden's budget. The yen was the worst G10 performer, while USD/JPY printed a seven-week high.

• Local media have circulated reports suggesting that the decision on extending emergency in nine prefectures through Jun 20 could come today, following the gov't's consultations with a panel of experts.
• Elsewhere, a Nikkei piece noted that the BoJ will consider pushing back the September deadline for its package of pandemic-relief measures. The decision can be made as soon as in June.
• Sankei reported that Japan considers offering AstraZeneca jabs to Taiwan. This comes a day after PM Suga and EU Commission Pres von der Leyen issued a joint statement calling for "peace and stability across the Taiwan Strait".
• Unemployment & Tokyo CPI headline the local docket today. Next week, focus turns to flash industrial output, retail sales, consumer confidence & housing starts (Monday) as well as capex, company sales/profits & final Jibun Bank M'fing PMI (Tuesday).
• USD/JPY last sits at Y109.86, a touch higher on the day. The nearby Apr 9 high of Y109.96 provides the initial layer of resistance and a break here would open up Apr 6 high of Y110.55. On the flip side, a fall through May 25 low of Y108.56 would shift focus to May 7 low & key short-term support at Y108.34.