USD/JPY bears holding their positions below 107 level

USD/JPY is trading flat for the start of Tokyo in the opening hour. The pair has been in a tight 10 pip range between 106,.84/94 since the start of the week, so far,

From Friday, the markets gave been in consolidation while risk sentiment was mixed as investors lean on the air of caution when approaching markets at extremes while COVID19 shows little sign of retreating in its spread around the world. 

Regional equities and currencies were slipping on the expanding US case count and USD/JPY fell from 107.00 to 106.64 before rebounding to 106.95.

There was one lifeline thrown on the headlines that Gilead Sciences reported that its antiviral drug Remdesivir recorded positive results in clinical trials.

Analysts at Westpac explained that the treatment had been reducing mortality rates by 62% compared to standard care and noted that German biotech firm BioNTech said it is confident its vaccine will be ready for regulatory approval by the end of the year.

Several hundred million doses could be produced even before approval, and over 1 billion by the end of 2021, according to CEO Dr. Ugur Sahin.

In other news, trade wars were rearing their ugly head again with US President Trump casting doubts on a phase two trade deal, saying the relationship with China has been "severely damaged".

• US warns its citizens in China they risk ‘arbitrary’ arrest

There have been some additional comments in a war of words piping up again with White House trade advisor Peter Navarro saying he expects President Trump to take “strong action” against Chinese-owned TikTok and WeChat for engaging in “information warfare”.

Economic adviser Kudlow also said it would be “unwise” for US investors to put their money in China.

Chinese media has responded in kind.

The Global Times today has reported that a "US travel advisory on China, citing “arbitrary detention” as an excuse, is a blatant distortion of facts in a bid to hype up a “china fear” sentiment among Americans, which will push the two countries further apart on the decoupling track." 

as for US data, ahead od Retail sakes this week and Consumer Price Index, US June Producer Price Index inflation was soft, falling 0.2%m/m (vs est. +0.4%m/m), and ex-food and energy falling 0.3%m/m (vs est. +0.1%m/m).

Meanwhile, the Federal Reserve's Robert S. Kaplan wants to see the government doing more as he gave the nod to adding to the current fiscal and monetary policy. He said the risks are skewed towards dis-inflation due to excess capacity. 

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