Yesterday the USDJPY peaked at around 155.54 yen at approximately GMT 02:30, then traded lower to reach a low of 154.51 yen at around GMT 12:00. Trading for the day closed at 155.06 yen.

Today the USDJPY is trading softly following reports that the Bank of Japan is expected to maintain its rate hike stance even after a December rate increase. It reached a low of 154.79 shortly after GMT 04:00 and as of GMT 05:00 is trading in the upper 154-yen range.

Looking at the 1-hour chart of the USDJPY (as of GMT 05:00 on December 5), the pair has failed to break higher and is trending down--a pattern where selling on rallies appears to be the effective strategy. A break below 154.51 yen would likely make 154.0 yen the next downside target.

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

The main economic indicators for today are as follows:

• GMT 15:00 U.S. September Personal Income
• GMT 15:00 U.S. September Personal Consumption Expenditures (PCE)
• GMT 15:00 U.S. September Personal Consumption Expenditures (PCE deflator)
• GMT 15:00 U.S. September Personal Consumption Expenditures (PCE core deflator, excluding food and energy)