Yen Slips Amid Risk-On Flows, Japan Returns From Holidays

USD/JPY shot higher Monday after the latest U.S. Markit PMI survey suggested that the pace of expansion across all three major indices reached multi-year highs. The yen finished the day as the worst G10 performer, as positive Covid-19 vaccine news and U.S. Pres-elect Biden's decision to nominate ex-Fed Chair Yellen to be the next U.S. Tsy Sec supported risk appetite. A public holiday in Japan may have thinned out liquidity in JPY crosses.

• Japan is back from its long weekend today and USD/JPY has popped higher on the back of aforementioned news re: U.S. presidential transition.
• Japanese FinMin Taso said that the gov't will consider extending the domestic travel campaign, based on budget usage. Earlier, NHK reported that Japan is set to suspend to campaign for Osaka and Sapporo owing to the increased spread of Covid-19 infections in these cities.
• Per Sankei, the gov't & ruling parties consider putting together a third extra budget for this fiscal year, which would be finalised in early Dec and exceed Y20tn.
• USD/JPY last sits +10 pips at Y104.62, with bulls looking for a rally above Nov 13 high of Y105.16, followed by Nov 11 & bull trigger at Y105.68. Bears see Nov 18 low of Y103.65 as their initial target and a break here would open up Nov 6/Mar 12 lows of Y103.18/09.
• BoJ Gov Kuroda will testify to lawmakers later today. Data-wise, focus turns to Friday's Tokyo CPI.