Yesterday the USDJPY began to fall after hitting a high of 155.21, then continued its decline to a low of 152.64 yen just before the close.

Because there had recently been hints of additional rate increases by the Bank of Japan in the Nikkei and elsewhere, yen purchases to take this into account made headway in the market.

The closely watched Bank of Japan Monetary Policy Meeting resulted in a decision to raise interest rates 0.25%, in line with earlier leaks. The USDJPY fluctuated violently after the news came out at GMT 04:00, plunging to a low of 151.57 and then soaring to 153.89 directly after.

Looking at the 1-hour chart of the USDJPY (as of GMT 05:30 on July 31), the middle line of the Bollinger Bands is trending down even after the volatility, which suggests bearish sentiment.

(20-period Bollinger Band, showing ±1 and ±2 standard deviations)

Today's main economic indicators are as follows.

• GMT 12:15 U.S. July ADP employment change (MoM)
• GMT 12:30 U.S. Q2 Employment Cost Index (QoQ)
• GMT 13:45 U.S. July Chicago Purchasing Managers Index
• GMT 14:00 U.S. June Pending Home Sales (MoM)
• GMT 14:00 U.S. June Pending Home Sales (YoY)
• GMT 18:00 Announcement on interest rates after U.S. Federal Open Market Committee (FOMC) meeting

It is considered almost certain that the FOMC will leave interest rates unchanged, so attention will be focused on whether any comments emerge that are supportive of a rate cut in September.