Japan’s Golden Week holidays begin Thursday

29 April to 5 May inclusive (Thursday to Wednesday)

Friday 30th sneaks in, its not actually a holiday but will be taken by many.
Tokyo FX markets will be absent for the holidays with therefore reduced liquidity during the Asian timezone.
Holidays in the 4 prefectures, Tokyo and the western prefectures of Osaka, Kyoto and Hyogo, with a state of emergency will be subdued. Residents of the four prefectures have been asked to reduce outings, to a minimum and refrain from travelling outside the prefectures. Residents of other parts of the country were urged not to travel to the four prefectures.

Tokyo reportedly finds 266 new coronavirus cases in latest update today

NHK reports on the latest virus situation in the Japanese capital

That just reaffirms the narrative that the low count from yesterday was largely skewed by the ‘weekend effect’ and the fact that there was a long weekend in Japan.

The virus trajectory in Japan has not been encouraging since the start of the month, with the spread of infections already surpassing that seen during the initial outbreak. As of yesterday, Japan has recorded over 8,000 active cases – the most since early May.

For now, the government is still maintaining that the situation does not call for any extraordinary measures to curb the spread of infections but let’s see how long they can keep at this with the Olympics next year a key focus as well.

Japan PM Abe: Current situation does not call for state of emergency declaration

Comments by Japanese prime minister, Shinzo Abe

  • Coronavirus cases are rising, government is watching closely
It is clear that the virus situation across the country is not getting any better as the curve is steepening as the days go by. Japan reported a single day record of 980 new virus cases yesterday, with infections also picking up outside of Tokyo.
Osaka is reported to find 149 new cases today and that would be the daily record for the prefecture, with Tokyo having found another 260 new cases as reported earlier.
As much as the government insists that things are “under control”, you have to wonder where will they draw the line and say that they have made a mess of the situation.
Eventually, the fear of the virus spread in itself will take a toll on the economy – as much as the government wants to keep business activity running for as long as they can afford to. Unfortunately, that comes at the costs of people’s health and well being, and at worst lives.

Japan reaffirms that state of emergency declaration is not needed for now

Tokyo finds another 119 new coronavirus cases today

Japan economy minister, Yasutoshi Nishimura, is out to reaffirm that there is no need to declare another state of emergency in Tokyo just yet despite the consistent jump in the number of coronvirus cases in the capital over the past two weeks.
The count today may be skewed due to the ‘weekend effect’, with Tokyo having previously reported over 200 new cases each day over the last four days before this:

Tokyo reports the highest number of new COVID-19 cases since May 5

47 new cases reported by the Tokyo Metropolitan Government on Sunday

  • 47 new coronavirus infections in the capital
  • 18 of them in the Kabukicho entertainment district in Shinjuku Ward
  • of the 29 other infections, 7 linked to  a hospital, 4 to nightlife venues
Here we go, Tokyo Gov. Koike said the jump in cases resulted from very active testing. Yeah, sure.
If you are heading out to a nightclub, consider wearing a mask folks (and have a good time!)

Reminder: The BOJ will be holding an emergency policy meeting tomorrow

The meeting will begin at 0000 GMT

  • BOJ calls for unscheduled monetary policy meeting on 22 May
The central bank is likely to announce a new scheme to facilitate funding for banks to extend to small businesses that have been hit by the fallout from the coronavirus outbreak.
In short, it is yet another measure to bolster liquidity conditions in the financial system, in order to ease corporate funding strains.
I don’t believe that the Kuroda & co. will offer any surprises beyond that, so expect other monetary policy tools to remain unchanged. They will likely just use the meeting to communicate the details of the new scheme if anything else.
As for the impact on the yen, I would argue that this should not play too significant of a role as the central bank has played it down and Kuroda has made mention to this in the past.
For USD/JPY, continue to keep an eye on the elusive 108.00 handle in any case.

Japan press reports a state of emergency to be declared on Tuesday or before

In that post some alarming developments from Tokyo over the weekend:
  • Tokyo Metropolitan government confirmed 143 new coronavirus infections on Sunday
  • that’s the highest rate of increase on record
  • total in Tokyo now is 1,034
  • The daily infection rate has more than tripled in just a week
Japan had been ahead of the curve on the outbreak but have since let their guard slip.

Wondering what time the BOJ announcement is expected today? Here you go!

Its the first BOJ statement for the year today. The Bank of Japan does not have a specific pre-announced time for issuing the statement at the conclusion of their monetary policy meeting.

  • It is likely in the 0230-0330 GMT time window (see below for why this a reasonable estimate)
  • The later the announcement, the more likely there is some material change to bank policy or guidance. So, if the clock ticks past 0315GMT, the likelihood of change increases.
  • Governor Kuroda will give a press conference after the announcement, and for that we do have a scheduled time, at 0630 GMT
Expectations are for no change in policy settings today:
  • BOJ policy statement due Tuesday – preview
Past statement times:

  • 29 January 12.38pm 0338GMT – added easing (negative interest rate)
  • 15 March 2016 1235pm 0335GMT
  • 28 April 2016 12.01pm 0301GMT
  • 16 June 2016 11.45am 0245GMT
  • 29 July 2016 12.44pm 0344GMT (more easing, added in further ETF purchases)
  • 21 September 2016 1.18pm Tokyo time, 0418GMT (comprehensive review and a stack of new policy moves)
  • 01 November 2016 0254GMT
  • 20 December 2016 0251GMT


  • 31 January 2017 1156AM Tokyo time, 0256GMT (maintains policy steady)
  • 16 March 2017 1154am Tokyo time, 0254GMT (maintains policy steady)
  • 27 April 2017 1214pm Tokyo time, 0314GMT (maintains policy steady, upgraded economic outlook, pushes out inflation forecasts)
  • 16 June 2017 1154am, 0254GMT (maintains policy steady, maintains economic outlook … boosts its outlook for private consumption)
  • 20 July 2017 1210 Tokyo time 0310GMT (maintains policy steady, upgraded economic outlook, pushes out inflation forecasts)
  • 21 September 2017 0315GMT (maintains policy steady, upgraded assessment on public investment)
  • 31 October 2017 0304 GMT (maintains policy steady … noob on the Board Kataoka wants more easing!)
  • 21 December 2017 0245 GMT (maintains policy steady … noob on the Board Kataoka wants more easing … again. BOJ kept economic assessment unchanged)


  • 23 January 2018 0314 GMT – monetary policy held steady
  • 9 March 2018 0245GMT
  • 27 April 2018 0302GMT – policy held steady, removes phrase on expected timing for hitting price goal
  • 15 June 2018 0241GMT – policy held steady, downgrades its assessment of CPI
  • 31 July 2018 0403GMT – policy tweaks
  • 19 September 0247GMT – – monetary policy held steady
  • 31 October (sry but I do not have a note of the time the statement was released for this one)
  • 20 December 2018 0252 GMT – no changes to policy


Next week brings the FOMC and BOJ meetings – forecast range for USD/JPY

A note via MUFG on the yen for the week ahead, analysts looking for 107/111 for USD/JPY.

On the Federal Open Market Committee meeting:
  • USD/JPY has already priced in a rate cut by the FOMC to some degree, so would not react much to a cut. If the Fed does defer on cutting rates, then the initial reaction would likely be USD buying, but stock price weakness would likely cap a rise by USD/JPY
And, on the Bank of Japan:
  • BoJ will maintain current monetary policy
  • BoJ Governor Kuroda commented in an interview that he expects a rate cut, so if the BoJ stands firm on policy, JPY may strengthen slightly but probably not continue. But if the BoJ does make some sort of policy change, JPY would initially weaken but not continue to do so because of concerns about side effects and continuity, and at some point USDJPY would lose steam. 
And, of course on a big driver:
  • Ultimately Brexit continues to loom and there will likely be little sense of direction despite some volatility.
FOMC on the 30th, Wednesday next week.
BOJ on the 31st, Thursday next week.
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