Japanese Yen Higher As Covid-19 Infections Soar In Tokyo

The Japanese yen climbed against its key counterparts in the Asian session on Thursday, as a surge in new infections in the Tokyo region prompted investors to seek the safe haven currency.

Tokyo on Wednesday reported 1,149 new cases, the most since January 22. It was for the first time in about two months that daily cases surpassed 1,000 mark.

The emergence of a COVID-19 cluster at a Japanese hotel, where Brazilian Olympic team members are lodging added to worries.

Seven staff at the hotel had been infected with coronavirus and Brazilian team were isolated from other guests.

The Japanese government had imposed a state of emergency in Tokyo until after the Olympic Games end on August 8.

Official data showed that China's annual GDP rose less than expected in the second quarter.

GDP was up 7.9 percent on year in the second quarter - shy of expectations for a gain of 8.1 percent and down sharply from 18.3 percent in the three months prior.

Data from the Ministry of Economy, Trade and Industry showed that Japan's tertiary activity declined for the second straight month in May.

The tertiary activity index fell 2.7 percent month-on-month in May, following a 0.8 percent decrease in April.

The yen rose to 6-day highs of 81.88 against the aussie, 87.49 against the loonie and 109.75 against the greenback, from its prior lows of 82.34, 87.92 and 110.03, respectively. If the yen rises further, it may challenge resistance around 80 against the aussie, 86.00 against the loonie and 108.00 against the greenback.

The yen appreciated to a 1-week high of 129.84 against the euro, 6-day highs of 120.02 against the franc and 151.69 against the pound, off its previous lows of 130.20, 120.29 and 152.46, respectively. On the upside, 127.5, 116 and 149 are possibly seen as its next resistance levels against the euro, the franc and the pound, respectively.

The yen reversed from its early low of 77.46 against the kiwi and was trading at 76.88. Next key resistance for the yen is seen around the 74 level.

Looking ahead, the U.S. weekly jobless claims for the week ended July 10, New York Fed's empire manufacturing survey for July, import and export prices and industrial production for June will be featured in the New York session.

Federal Reserve Chair Jerome Powell is due to testify on the semi-annual monetary policy report before the Senate Banking Committee in Washington DC at 9:30 am ET.