Yen Loses Shine, Covid Causes Pre-Olympic Jitters

USD/JPY jumped into the WMR fix on Tuesday, as broader risk sentiment recovered. Worth mentioning that Tuesday was a Gotobi day.

• Public health experts have warned that Japan's isolation bubble system designed for the Tokyo Olympics is already broken. Global media outlets telegraphed headlines highlighting cautious rhetoric from Head of the Olympic organising committee Toshiro Muto, who refused to rule out a cancellation of the Games "if there is a spike in [Covid-19] cases." Separately, PM Suga told the WSJ that Japan is fully prepared to host the Olympic Games and rejected the suggestion that the IOC were behind the idea to hold the event despite obvious headwinds.
• The Nikkei reported that Japan wants to extend its employment subsidy programme through the end of December.
• Japan's monthly trade data and final machine tool orders will be published today.
• USD/JPY has added a handful of pips and last sits at Y109.89. Bulls see Jul 16 high of Y110.34 as their initial target and a move through that level would open up Jul 14 high of Y110.70. Bears look for a dip through Jul 19 low of Y109.07, towards May 25 low of Y108.56.