State Of Emergency Expanded, Suga Prepares For LDP Leadership Contest

USD/JPY advanced in generally risk-on trade Wednesday, with markets in the waiting mode ahead of Jackson Hole speeches. The rate changes hands at Y110.00 as we type, barely changed on the day. A move through Aug 13 high of Y110.46 would bring Aug 11/Jul 7 highs of Y110.80/82 into view. On the downside, focus falls on Aug 24 low of Y109.41, followed by Aug 16 low of Y109.11.

• The widely touted plan to place anther eight prefectures under a Covid state of emergency was finalised formally announced yesterday. The declaration will take effect on Friday and means that areas making up more than 70% of Japan's population and nearly 80% of the economy will be covered by emergency measures.
• PM Suga is preparing for a difficult party leadership race next month. Local media outlets reported this week that Foreign Min Kishida may announce his intention to run against Suga as soon as today, while other possible contenders include conservative lawmaker Sanae Takaichi and LDP policy chief Hakubun Shimomura. The incumbent Premier appears to have secured the backing of factions led by Toshihiro Nikai (LDP SecGen) and Hiroshi Moriyama (LDP diet affairs chief), but he continues to face criticism over his handling of the outbreak of Covid-19.
• Japan's services PPI will be released later today, with Tokyo CPI coming up Friday.