Yen Falters On Better Risk Sentiment, Japan Takes Holidays

Firmer sentiment reduced demand for safe havens, pushing USD/JPY higher Wednesday. Strong U.S. corporate earnings supported U.S. equity markets, leaving the yen as the worst G10 performer. USD/JPY printed its best levels in one week.

• Japanese markets will be closed over the next couple of days in observance of the Marine Day and the Health-Sports Day, which coincides with the opening of the Tokyo Olympics.
• Officials recorded 1,832 new Covid-19 cases on Wednesday, the largest increase in more than half a year. Health experts advising Tokyo Metropolitan Gov't warned that daily cases could rise further during the Olympics.
• BoJ Dep Gov Amamiya told a group of Niigata business leaders that "it is necessary for the bank to persistently continue to conduct powerful monetary easing" amid persistently low inflation.
• USD/JPY changes hands at Y110.27, little changed on the day. Bulls need a clearance of Jul 21 high of Y110.39, before targeting Jul 14 high of Y110.70. Bears look for a dip through Jul 19 low of Y109.07, which would expose May 25 low of Y108.56.