USD/JPY Round Trips From Multi-Month Low As Virus Matters Dominate

USD/JPY was heavy at the start to the week after Japanese PM Suga said the gov't will consider declaring a state of emergency in Tokyo and three neighbouring prefectures, while speculation about details trickled through via numerous press reports, suggesting that the declaration could come as soon as this week and last for about a month. The rate clawed back most losses later in the day, as deepening lockdowns in Europe and jitters ahead of Georgia runoff elections inspired fresh demand for USD. Despite bouncing from a new 10-month low printed in the London morning, USD/JPY closed in negative territory.

• Today's Kyodo report cited multiple gov't officials as expecting a state of emergency to be declared in Tokyo, Saitama, Chiba and Kanagawa on Thursday, confirming earlier headlines.
• USD/JPY trades flat at Y103.14, bears keep an eye on Monday's low of Y102.71. A break here would open up Mar 1 low of Y102.02. Bulls need a clearance of Dec 31 high of Y103.32 before targeting the 20-EMA at Y103.54.
• Japanese consumer confidence hits the wires tomorrow, cash earnings data comes out Thursday, while household spending is due Friday.