Reuter’s reports that Japan plans to release several estimates for its economic growth in fiscal 2020 and 2021 because of the uncertainty over the corona-virus pandemic. A real Gross Domestic Production contraction of around 4.5%, revising its pre-corona virus projection for a 1.4% growth.

For the next fiscal year from April 2021, the government will forecast real GDP growth of around 3.5%, according to the report.

The government will give projections for gross domestic product growth (GDP) on the basis of two assumptions that the pandemic would either end quickly or be prolonged, an unusual move underscoring the unpredictability policymakers face from the health crisis.

The surge in new COVID-19 cases in Japan’s major prefectures is further pressurizing the outlook for the economy after it had seemingly passed through the worst of the pandemic.

“We have seen a spike of infection cases mainly in Tokyo. I’m concerned this will impact people’s consumption to a certain level,” said Shinichiro Kobayashi, an economist at Mitsubishi UFJ Research and Consulting Co.

Surge of corona-virus most US states along with rising jobless claims and political uncertainty acts as a catalyst for the downtrend of Dollar. More recently, intensifying tensions with China – the world’s second-largest economy – pose another threat for the greenback.

USD/JPY 4 Hour Chart:

Support: 104.74 (S1), 104.48 (S2), 104.01 (S3).

Resistance: 105.47 (R1), 105.94 (R2), 106.20 (R3).

The COVID – 19 cases are surging in Japan but due to the nation’s surplus current account, investors remain keen on the yen. We expect a bearish trend for USD/JPY.