Virus Angst Overshadows Olympic Preparations

USD/JPY has shed a handful of pips so far and last changes hands at Y109.99 amid a marginal downtick in e-minis as the Tokyo session got underway. Bears see Jul 8 low of Y109.53 as their initial target and a break here would clear the way to Jun 7 low of Y109.19. On the flip side, a rally past Jul 14 high of Y110.70 would shift focus to Jul 7 high of Y110.82.

• PM Suga's approval ratings fell to all-time lows in both Kyodo and Mainichi surveys, just ahead of the start of the Olympic Games on Friday, with large majority of respondents voicing criticism of the gov't's Covid-19 policies.
• Meanwhile, the epidemiological situation in Tokyo and neighbouring provinces is far from ideal. Kanagawa declared a state of emergency last Friday (it takes effect this coming Thursday), Saitama and Chiba have expanded areas covered by virus countermeasures, while Tokyo declared its largest increase in new Covid-19 cases since Jan 21 over the weekend.
• The Olympics will provide a platform for PM Suga to make impression on the few foreign guests still set to attend. Yomiuri reported that PM Suga will meet with South Korean President Moon on Jul 23 in Tokyo. Moon will take part in the opening ceremony of the Olympic Games, as will FLOTUS Jill Biden.
• On the data front, focus in Japan turns to national CPI (Tuesday) & trade balance (Wednesday). Elsewhere, on Wednesday the BoJ will release the minutes from their June MonPol meeting.