Yesterday the USDJPY began rising around GMT 00:30, reaching a high of 155.97 shortly after GMT 10:00 before losing momentum. The pair then dropped sharply following the disappointing U.S. November CPI results released at GMT 12:30.

It hit a low of 155.28 around GMT 14:30, at which point the decline stabilized, and trading for the day closed at 155.52 yen.

Today the USDJPY saw yen selling dominate ahead of the Bank of Japan's monetary policy announcement. When the expected 0.25% rate hike was confirmed, the pair reached a high of 156.16 yen shortly after GMT 03:00. As of GMT 05:00, it is trading in the lower 156-yen range.

Looking at the 1-hour chart of the USDJPY (as of GMT 04:50 on December 19), the pair broke above 156.0 after a period of consolidation. If it continues to rise past 156.16 yen from here, it may be time to shift to a bullish outlook.

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

The main economic indicators for today are as follows:

• GMT 15:00 U.S. November Existing home sales
• GMT 15:00 U.S. December Michigan Consumer Sentiment, final