Tokyo Sees Another Record Increase In Covid Cases

The Fed stole the show on Wednesday, allowing USD/JPY to trim its earlier gains. The rate ground higher in the lead-up to the announcement, but some cautious remarks during Fed Chair Powell's presser inspired a pullback from intraday highs. Wednesday was a bullish inside day for USD/JPY.

• Tokyo declared its second straight record daily increase in new Covid-19 infections on Wednesday, while the nationwide case count topped 9,000, which fuelled concerns about the current wave of the virus. Local media outlets reported that officials are considering declaring a state of emergency in Kanagawa, Saitama and Chiba, the three prefectures neighbouring the capital. In addition, Asahi sources suggested that a state of emergency could be declared in Osaka.
• Domestic retail sales, unemployment and flash industrial output take focus on the data front in Japan. All are due Friday.
• USD/JPY last trades flat at Y109.91. Bulls keep an eye on Jul 23 high of Y110.59 and a breach of that level would clear the way to Jul 14 high of Y110.70. On the flip side, a slide through the 100-DMA/Jul 27 low at Y109.60/59 would turn focus to Jul 19 low of Y109.07.