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5Y Upside Skew Buy


Downtrend Persists

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USD/JPY turned its tail Monday, as lingering concerns surrounding the Covid-19 Delta strain stoked demand for safe havens. The rate staged a foray to its worst levels since May 27, before trimming some losses over the WMR fix, while the yen remained the best G10 performer.

  • Further positive Covid-19 cases were detected among the Olympic athletes, while NHK reported that Hokkaido will request a quasi-state of emergency.
  • South Korean Pres Moon will not be meeting with PM Suga after all. Moon cancelled his plans to visit Tokyo this week after a Japanese diplomat lashed out at him, using highly offensive terms.
  • Japanese CPI provides the main highlight of today's session, with core annual consumer-price inflation expected to print at +0.2%, according to Bloomberg survey of analysts. Later this week, focus moves to monthly trade balance & BoJ Jun MonPol meeting minutes, both due Wednesday.
  • USD/JPY trades at Y109.50, just above neutral levels, as we type. Losses past yesterday's low of Y109.07 would bring May 25 low of Y108.56 into play. Conversely, a jump above Jul 14 high of Y110.70 would allow bulls to take aim at Jul 7 high of Y110.82.