Tighter Covid Control Measures Eyed

USD/JPY retreated Monday as the greenback went offered across the board, while the yen drew support from geopolitical angst surrounding Russo-U.S. & Sino-U.S. tensions. USD/JPY sales were limited by the 50-DMA/round figure support at Y108.00, but the rate managed to register its worst levels since Mar 5. Implied ATM vols jumped across the curve.

• The tightening of restrictions in Japan's coronavirus hotspots is materialising, with Osaka expected to formally seek a declaration of emergency after today's meeting of the prefectural Covid-19 task force. Tokyo Gov Koike earlier hinted that she is considering a similar move. The central gov't has assured that it will swiftly respond to any such requests.
• NHK reported that China has been behind several cyberattacks in Japan.
• USD/JPY is little changed at Y108.15 as we type. The next bearish target is provided by the 38.2% retracement of the Jan - Mar rally at Y107.77. and a break here would expose trendline support at Y107.57. Bulls look for move through Apr 19 high of Y108.85, before taking aim at Y109.22, Apr 16 high.
• Final machine tool orders are due later today. Looking further afield, national CPI & flash Jibun Bank PMIs are due Friday.