Quarterly Tankan Manufacturing and Non-Manufacturing data from Japan prints upside momentum which favors yen. Growing expectations of a recovery led business sentiment to jump back into positive territory for the first time since February. Chief Cabinet Secretary Yoshihide Suga said today that Japan is currently not in a situation to declare a state of emergency but could do so in a worst-case scenario.

The capital Tokyo tries to keep new cases below 20 a day since Japan lifted a state of emergency on May 25, but has had five straight days of more than 50 new cases as of Tuesday, when 54 infections were reported. Still, Tokyo along with the rest of Japan has had a lower rate of infection than many countries. Japan has had nearly 19,000 diagnosed with 974 deaths.

US records a death toll of 129,000 and now corona virus cases have reached over 40,000 cases for the 5th time in the past 6 days and the new cases could more than double to 100,000 per day if the current surge spirals further out of control, the government’s top infectious disease expert has warned, although he was “cautiously optimistic” a vaccine would be available early next year.

“Clearly we are not in total control right now,” Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, told a U.S. Senate committee. “I am very concerned because it could get very bad.”

 USDJPY 4 Hour Chart:

Support: 107.63 (S1), 107.34 (S2), 107.17 (S3).

Resistance: 108.10 (R1), 108.27 (R2), 108.56 (R3).

The increasing strength of yen and rising infection of corona virus in US pushes greenback and sets a bearish trend for USD/JPY.