USD/JPY bears in control in a risk-off setting

USD/JPY is a touch soft in the open of Tokyo, weighed by the prior bearish session which took the cross down from a high of 107.40 to 107.10. 

The US dollar was mostly firmer, outperforming as the G10s as the US COVID-19 cases are starting to worry investors, seeing US stocks crumble, albeit recovering from their lows of the session into the close. 

More on Wall Street here: Wall Street Close: NASDAQ outpaces its comrades again.

More on COVID-19 here: COVID-19 update: Second waves yet to cause market distress.

Meanwhile, there are nerves around it being election-year with political uncertainty unfolding in the wake of the Supreme Court ruling on President Donald Trump’s financial records alarming investors.

The US Supreme Court rejected President Trump’s claim for absolute immunity in shielding his corporate and personal tax returns.

Trade war tensions between the US and China, as well as the HK dispute, are also simmering away which are keeping investors in their toes.

As for US data, the US weekly initial filings for jobless benefits of 1.314m were lower than estimated (est. 1.375mn). 

Continuing claims were better as well, in at 18.06mn (est. 18.75mn).

Analysts at Westpac explained that there is "speculation that the increase in COVID case counts and resultant restrictions will lead to an increase in claims in coming weeks."

In recent news today, it is reported that the Japan government likely to slightly revise up economic assessment in the July report, according to government officials.

USD/JPY outlook

The higher-yielding plays in the yen were in the crosses while 107.10 supports vs the greenback. A break here opens risk towards 106.70, the weekly Kijun and monthly Tankan.

USD/JPY Forecast: Still searching for direction