Yen Starts On Softer Footing

USD/JPY snaps its three-day pullback and last operates at Y105.53, 8 pips better off on the day and back above its 200-DMA. The yen lags all of its G10 peers at the margin, even as e-minis have shed their modest opening gains.

• After hours on Friday, the Japanese gov't cut its headline economic assessment for the first time since Apr 2020, owing to the state of emergency imposed to fight the spread of Covid-19 infections.
• Jiji Press circulated a source report noting that the Japanese gov't considers reducing the maximum amount of support granted under its Go To Travel campaign, if the scheme is resumed. One of the options under consideration involves slashing assistance to Y10,000 before a further phased reduction, while another option calls for cutting support to Y5,000 and extending the programme through autumn.
• A move through Feb 17 high of Y106.22 would allow bulls to take aim at Sep 3, 2020 high of Y106.55. On the downside, focus falls on Feb 16 low of Y105.18, followed by trendline support at Y104.74.
• Japanese data releases this week include Tokyo CPI, flash industrial output and retail sales, all due Friday.