USD/JPY is on downtrend after the decision of Complete vaccination program. Japan Ministry of Finance (MOF) announced today early morning that the cabinet’s approval of an emergency budget to battle the pandemic. “Japan’s cabinet approved a 9.27 billion yen ($84.50 million) emergency budget to help the country’s self-defense forces carry out medical aid amid the coronavirus pandemic,” Reported in Reuters.

Wheras Bloomberg has reported Japan’s vaccination drive has slowed, but is now on track to beat the current U.S. vaccine rate within weeks – good news for a economy that has endured one viral crisis after another. If the current pace is maintained, 51% of the population in Japan will be fully vaccinated by September 12. As soon as Sunday, the country will meet a major milestone and reach the 40% target set by Prime Minister Yoshihide Suga. Amid widespread criticism, the table does not do enough to control Japan’s Covid-19 cases.

Japan’s core consumer price index (CPI), which includes oil but excludes fresh food prices, fell 0.2% in July from a year earlier, marking the 12th straight month of declines, government data showed on Friday. The fall was due in part to a change in the base year for the CPI that gives a heavier weighting to mobile charge fees, which plunged a record 39.6% in July. But the drop was smaller than market forecasts for a 0.4% fall and a 0.5% decrease in June due to the boost from rising food and fuel costs, including a 19.6% spike in gasoline bills.

Prices of refrigerators and air conditioners, as well as accommodation fees, also rose in a sign some households were keen to spend after hunkering down during repeated stop-and-go state of emergency curbs. Japan’s economy rebounded more than expected in the second quarter after slumping in the first three months of this year, a sign consumption and capital expenditure were recovering from the coronavirus pandemic’s initial hit. But many analysts expect growth to remain modest in the current quarter as curbs reimposed to combat a spike in infections weigh on household spending.

Meanwhile Japan saw Burst of economic activity It grew for the second straight quarter as consumers returned to empty restaurants, bars and theaters in late 2020 and began to traverse the country on trips undertaken by the government’s reconstruction plan. Now, recovery depends on the government’s vaccination program and other efforts being able to control the spread of the virus. The country gives more than 1 million shots a day. If we can maintain that pace, we will exceed vaccination levels in the United States and the United Kingdom by early fall. However, if the vaccination program goes smoothly, Japan will “return to normal economic activity,” said Keiji Kanda, senior economist at Daiwa Institute of Research.

USD/JPY 4 Hour Chart:

Support: 109.42 (S1), 109.08 (S2), 108.68 (S3).

Resistance: 110.17 (R1), 110.57 (R2), 110.91 (R3).

Amidst all the catalysts favoring yen to some extent. We expect a bearish trend for USD/JPY.