The Dollar rose against the Yen as Japan announced a state of emergency as it struggled to battle an alarming rise in Covid-19 cases. Japanese Prime Minister Shinzo Abe reportedly said that he would increase fiscal spending with an unprecedented stimulus worth JPY 108 trillion (equivalent to USD 989 billion) or 20% of economic output. USD/JPY traded to an overnight high at 109.381 before easing to settle at 109.20 in late New York.

USD/JPY traded to 109.28 in early Asia this morning. Currently USD/JPY trades at 109.05. Immediate resistance can be found at 109.40 followed by 109.80. Immediate support lies at 108.50 followed by 108.20. The latest COT report saw speculative JPY long bets trimmed to +JPY 18,282 from +JPY 23,863. Look for a likely trade today between 108.40 and 109.40. While Japan’s outlook appears dire, that of the US and Europe are still far from settled. And risk appetite can easily turn on a sixpence. Prefer to sell rallies in the current market environment today.