Suga Intends To Run For LDP Leader, May Call General Election Later Than Expected

USD/JPY pushed higher Tuesday as U.S. retail sales missed expectations, inspiring a fresh bout of USD purchases. The yen remained afloat vs. other G10 currencies amid broader risk aversion linked to the spread of coronavirus.

• PM Suga formally declared an extension to its Covid-19 state of emergency through Sep 12 on Tuesday, adding seven more prefectures to the list of regions covered by the quarantine rules. The move confirmed earlier reports circulated by the local press, while Suga also pledged additional economic support for local gov'ts.
• Kyodo cited ruling coalition sources as noting that PM Suga is unlikely to call a general election in September. Several scenarios are being mulled, but the LDP's working assumption is to start campaigning on Sep 17 and hold the election on Sep 29. The latest possible date of the election is Nov 28, should PM Suga dissolve the lower house on the last day of its term.
• Suga said Tuesday that it was a "matter of course" for him to seek re-election as party leader. His current term as LDP chief expires at the end of Sep.
• Japanese trade balance & core machine orders are due later today, with national CPI coming up Friday.
• USD/JPY last trades at Y109.60, barely changed on the day. A break above Aug 11/Jul 7 highs of Y110.80/82 would give bulls a green light for targeting Y111.66, which capped gains on Jul 2. Bears would be pleased by a slide through Aug 4 low of Y108.72 towards May 25 low of Y108.56.