LDP Leadership Race, BoJ Speak In Focus

USD/JPY extended its bullish run Tuesday as the greenback led gains among G10 currencies amid month-end and quarter-end flows and higher U.S. Tsy yields, even as the broader risk tone was negative.

• Japan ruling party's leadership election steals the limelight today (click here for more colour on the matter). The results of the first round of voting will be announced at 14:20 JST. It the runoff vote takes place, its results will be announced at 15:40 JST.
• In addition, BoJ Gov Kuroda will appear alongside Fed, ECB & BoE chiefs on policy panel discussion at ECB Forum on Central Banking. On Thursday, Kuroda will speak at a JASDA conference.
• On the data front, focus turns to Japan's retail sales & flash industrial output (Thursday) as well as unemployment, Tankan Survey & final Jibun Bank M'fing PMI (Friday).
• USD/JPY overnight implied volatility crept higher this morning, as we await the outcome of LDP leadership race. It last sits at 9.30%, the highest level since Sep 22, when both the BoJ & FOMC delivered their monetary policy decisions.
• USD/JPY trades +4 pips at Y111.54, with bulls looking for a break above yesterday's/Jul 2 highs of Y111.64/66, which would clear the way to Mar 24 high of Y111.71. Bears see Sep 8 low of Y110.45 as their initial target.