Japanese Yen Weak Despite Record Surge of Coronavirus Cases

The Japanese yen was weak today amid a relatively positive market sentiment, which was limiting the appeal of the currency considered to be a safe haven during times of trouble. The traders’ mood remained optimistic despite the threat of the second wave of the coronavirus pandemic.
The World Health Organization reported that the number of new coronavirus cases rose by 230,370 as of July 12. It was the biggest increase on record. The previous record was registered just a few days ago on July 10. The number of new deaths remained steady at about 5,000. The news did not bother markets much, though, as the global economy was showing signs of recovery as countries were exiting lockdown. Hopes for a vaccine were also helping to keep the mood positive.
The Bank of Japan reported that Seiichi Shimizu will replace Takeshi Kato as the head of the central bank’s department overseeing monetary policy drafting. In his previous role as BoJ head of the markets department, Shimizu played a key role in implementing measures that helped markets to weather the coronavirus pandemic. The BoJ will review its monetary policy and make an announcement on Wednesday.
As for macroeconomic data, Japan’s Ministry of Economy, Trade, and Industry reported that the Tertiary Industry Activity Index dropped 2.1% in May. While not a good reading by itself, it was still better than the median forecast of a 3.7% drop and the previous month’s 7.7% slump (revised, 6.0% before the revision).
USD/JPY climbed from 106.87 to 107.10 as of 11:40 GMT today, rebounding from the daily low of 106.79. EUR/JPY gained from 120.75 to 121.39. At the same time, GBP/JPY was about flat at 134.91, retreating from the session high of 135.42.
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