Yen Appreciates As Japanese Govt. Considers Emergency Declaration For Tokyo

The Japanese yen strengthened against its major counterparts during the Asian session on Monday, as Japanese Prime Minister Yoshihide Suga said that the government is examining whether to declare a state of emergency for Tokyo area in the wake of a recent surge in new coronavirus cases.

On Saturday, Tokyo Governor Yuriko Koike and the governors of three neighboring prefectures requested the central government to announce a state of emergency due to soaring infections.

Tokyo reported a record of 816 new COVID-19 cases on Sunday.

Suga said that most cases were likely related to restaurants and the government has reduced its operating hours to contain the outbreak.

The restaurants and karaoke parlours in the Tokyo area have been ordered to close at 8 pm, whereas businesses that serve alcohol should shut at 7 pm.

Japanese shares fell on the first trading day of the year, as traders were disappointed about the news of the emergency declaration.

The yen climbed to 102.93 against the greenback, its highest level since December 17. If the yen rises further, it may face resistance around the 100.00 level.

The yen appreciated to a 1-week high of 126.10 against the euro, after falling to 126.53 at 6:45 pm ET. The yen is likely to find resistance around the 123.5 level.

Reversing from a low of 116.96 hit at 6:45 pm ET, the yen advanced to a 1-week high of 116.45 against the franc. On the upside, 112.5 is possibly seen as its next resistance level.

The yen reversed from a 4-month low of 141.31 seen in previous deals, with the pair trading at 140.94 versus the pound. Next key resistance for the yen is seen around the 138.00 region.

The yen gained to 79.16 against the aussie and 80.89 against the loonie, off its early low of 79.68 and more than a 2-week low of 81.20, respectively. The next possible resistance for the yen is seen around 76.00 against the aussie and 78.00 against the loonie.

The Japanese currency moved up to a 4-day high of 73.98 versus the kiwi, from a low of 74.35 set at 6:45 pm ET. The yen is seen finding resistance around the 72.00 level.

Looking ahead, PMI reports from major European economies and U.K. mortgage approvals for November are due in the European session.

U.S. construction spending for November will be out in the New York session.

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