Japan, Tokyo Report Record Daily Covid Tallies

USD/JPY surged off its intraday/two-month lows Wednesday as Fed's Clarida delivered a round of marginally hawkish comments, noting that the FOMC could start raising interest rates in early 2023. His remarks overlapped with the release of U.S. ISM Services Index, which came in firmer than expected. The U.S. data came on the heels of a beat in China's Caixin Services PMI, which supported risk appetite in Asia-Pac hours. The yen finished the day as the worst G10 performer.

• Public broadcaster NHK reported that Japan is set to extend its Covid-19 quasi-emergency measures to 8 prefectures. Japan logged more than 14,000 new infections for the first time on Wednesday. Around a third of those cases were detected in Tokyo, a record high for the capital. Japan's top Covid-19 adviser Omi warned that Tokyo's daily case count could soon reach 10,000.
• On the data front, focus turns to Japan's earnings/spending data, due Friday. As a reminder, today is a Gotobi day in Japan.
• USD/JPY deals at Y109.51, little changed on the day. Bulls look to take out Jul 23 high of Y110.59, which would clear the way to Jul 14 high of Y110.70. Meanwhile, should bears manage to force a break under Aug 4 low of Y108.72, they could take aim at May 25 low of Y108.56.