On Friday of last week, the announcement in the U.S. of nonfarm payrolls for July revealed a significant month-on-month decline. Against expectations of 175,000, the actual figure was an extraordinarily weak 114,000, leading to a plunge in the USDJPY. This reinforced the existing downward trend and led to a low of 146.41 yen.

Today the USDJPY continued to fall in the Tokyo session, leading to a low of 142.18 some time after GMT 04:00.

The Nikkei Stock Average has already fallen around 10,000 yen from the high of 42,000 that it reached in early July, and the tone of the market is now clearly different to that of the first half of the year. Furthermore, today also saw the operation of a circuit breaker in Japan's stock market.

Looking at the 1-hour chart of the USDJPY (as of GMT 05:20 on August 5), the band-walking along the lower band is very easy to discern.

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

Today's main economic indicators are as follows.

• GMT 13:45 U.S. July Services Purchasing Managers Index (PMI, revised)
• GMT 13:45 U.S. July Composite Purchasing Managers Index (PMI, revised)
• GMT 14:00 U.S. July ISM Services PMI