Yen Garners Strength Thursday, Japan Extends Virus Emergency

Broader greenback sales dragged USD/JPY lower Thursday, as U.S. Tsy yields faltered, extending losses after a strong 30-Year Tsy auction. Risk aversion lent further support to the yen, which was among the best G10 performers.

• USD/JPY trades at Y109.79, a handful of pips higher on the day. Bulls see Sep 8/Aug 13 highs of Y110.45/46 as their initial target and a break here would open up Aug 11/Jul 7 highs of Y110.80/82. Downside focus falls on Aug 31 & Sep 3 lows of Y109.59, followed by Aug 24 low of Y109.41.
• Japan formalised an expected extension to state of emergencies in 19 prefectures through the end of the month, but also outlined an exit strategy. The government plans to ease restrictions from around November, with the help of certification systems.
• Japan's vaccine czar Taro Kono is expected to announce his bid to become the next PM this afternoon, after rival Sanae Takaichi threw her hat in the ring. Separately, PM Suga confirmed that he will run in the upcoming general election despite stepping down as Premier.
• Next week's highlights include BSI survey & PPI (Monday), final industrial output (Tuesday), core machine orders (Wednesday), trade balance (Thursday).