Yen Extends Losses To Fresh Cycle Lows, Japan Returns From Holiday

A round of hawkish comments from Fed Chair Powell pushed USD/JPY higher on Monday, with Japanese markets shut for a public holiday. The rate lodged fresh six-month highs as a result.

• USD/JPY has added a further 21 pips as local markets re-opened. It last trades at Y119.68, hitting new cycle highs, with bulls keeping an eye on the psychological Y120.00 level. Bears need a pullback under Mar 16 low of Y118.18 to get some reprieve.
• The local press suggested that the government is preparing a new stimulus package. A Sankei report estimated its cost at over Y10tn, while Yomiuri noted that the ruling coalition is considering expanding planned cash handouts for pensioners and younger people.
• Note that recent headline flow has flagged the latest parliamentary appearance for BoJ Governor Kuroda (which will take place around 09:50 Tokyo/00:50 London). There is nothing else of note on the local docket on Tuesday.
• Looking further afield, final machine tool orders (tomorrow), flash Jibun Bank PMIs & BoJ Jan MonPol meeting minutes (Thursday) as well as Tokyo CPI & comments from BoJ's Kataoka (Friday) are on the radar.