On Friday of last week the USDJPY trended upwards from around GMT 03:00 ahead of the election and announcement of the leader of Japan's Liberal Democratic Party, reaching a high of 146.48 not long after GMT 05:00.

Shortly after GMT 06:00, Shigeru Ishiba was elected leader of the Liberal Democratic Party. The market reacted by selling the yen aggressively, which plunged from above 146 yen to the 143-yen range. The decline subsequently continued, with the price hitting a low of 142.07 at around GMT 19:30, and trading for the week closing at 142.16.

It being the end of the month and also a so-called "5/10 day" (a date ending in "5" or on a multiple of "10" on which Japanese companies often settle foreign exchange payments), the USDJPY rose from around GMT 22:00 and reached a high of 142.95 shortly before GMT 00:00 before falling back.

With the expectation being that the House of Representatives will be dissolved and a general election held on October 27, it seems likely that the political situation in Japan will continue to have an impact on trading in the USDJPY market.

Looking at the 1-hour chart of the USDJPY (as of GMT 04:10 on September 30), it appears that the market is in a correction after the price plummeted on Friday.

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

The main economic indicators for today are as follows:

• GMT 13:45 U.S. September Chicago Purchasing Managers Index
• GMT 17:55 U.S. Statements from FRB Chairman Jerome Powell