The lack of bad news on reopenings in most key economies and the prospect of further lifting of pandemic restrictions heading into the crucial summer travel season in the northern hemisphere is weakening the haven yen against the dollar nL1N2D00LK, and more so against other currencies.
Last week's anxiety about slower recovery prospects nL1N2D00FY and U.S.-China tensions has faded.
Even with horrendous U.S. data nAQN02JCPV and dire warnings from the Fed about near-term recovery prospects nL1N2CV0QFnL1N2CX1YP, USD/JPY last week managed to hold nearby supports.
It's above its daily kijun and cloud top at 107.23/30 and eyeing the pivotal 55-DMA at 107.55 on EBS.
A close above there and the 50% Fibo of the April-May drop at 107.68 would target important resistance at 108.08.
And unlike during the initial phases of the pandemic crisis, USD/JPY is returning to its positive correlations with stocks and Treasury-JGB yields, a sign of normalcy returning.
Bigger gains in GBP/JPY, AUD/JPY and EUR/JPY, etc, as well as oil and metals, highlight market hopes that pandemic restrictions won't have to be reimposed during tourist season nS8N2CV02Y and that haven yen longs should be cut or reversed.
Chart Click here