U.S. stocks have recovered most of this year’s losses, helping to push up global prices, despite rising numbers of American corona virus infections that threaten to derail economic improvement. Investors are buying technology and other companies they expect to emerge stronger from the global downturn. Amazon added 2.7%, Apple rose 2.3% and Microsoft gained 2.2%.

COVID 19 cases in US has reached 3 million overnight, affecting more than 60k on July 8th. California, Hawaii, Idaho, Missouri, Montana, Oklahoma, and Texas broke their previous daily record highs for new infections. The country now has 3,035,231 COVID-19 cases, including 132,041 deaths. This rise in cases began at the end of May, following the reopening of most states’ local economies. Fed’s Bostic reiterated that the infections spikes are hampering the reopening outlook, but broad shut down is not expected.

Despite numbers of new cases, Dr. Fauci saying that a Phase 3 vaccine trials may begin at the end of July favored dollar. Investors picked up on his cautious optimism for a vaccine by year-end. US currency has decreased in value with response to the corona virus pandemic and protests over racial inequality that has eroded support for President Donald Trump.“If we look at the idea of American exceptionalism, that has dimmed dramatically during this crisis,” said Karl Schamotta, chief market strategist at Cambridge Global Payments. “Growth differentials are tilting against the United States, putting the dollar on the defensive.”

USD/JPY 4 Hour Chart:

Support: 107.07 (S1), 106.88 (S2), 106.56 (S3).

Resistance: 107.57 (R1), 107.89 (R2), 108.08 (R3).

Even though the optimism among investors develops as US economy shows recovery phase and vaccine trials are underway but the rising cases of COVID 19 undermine the strength of Dollar. We expect a bearish trend for USD/JPY.