Japan To Strengthen Covid-19 Rules In Five Prefectures

USD/JPY pulled back from a one-month high Thursday, as the greenback lost ground. Despite an early uptick, the rate generally ground lower through the rest of the day, albeit it stuck to a 38 pip range.

• Japan recommended stronger Covid-19 countermeasures in five prefectures, following press reports suggesting as much. A Jiji source piece flagged that the gov't will give quasi-emergency status to Gunma, Ishikawa, Okayama, Hiroshima and Kumamoto. The new rules could take effect on Sunday and last until Jun 13.
• In his latest address, BoJ Gov Kuroda said that the central bank stands ready to buy ETFs aggressively if needed. He noted that there are no fixed rules which trigger ETF purchases and decisions are made on the basis of the assessment of market conditions. Speculation about the potential trigger have been doing the rounds for some time, with some suggesting a 2% morning fall in the Topix as a potential candidate.
• The local data docket is empty today. Focus moves to next week's PPI & flash machine tool orders (Monday), flash GDP (Tuesday), final industrial output (Wednesday), trade balance & core machine orders (Thursday) as well as CPI & flash Jibun Bank PMIs (Friday).
• USD/JPY last operates at Y109.48, little changed on the day. A break under May 7 low of Y108.34 would bring Apr 27 low of Y108.08 into play. Conversely, a jump above May 13 high of Y109.79 would expose Apr 9 high of Y109.96.