Yesterday the USDJPY started strong immediately after the open, but reversed after hitting a high of 157.29 shortly after GMT 04:30. Weak December ISM Manufacturing PMI data added to the selling pressure, pushing the pair to a low of 156.11 around GMT 19:00. The decline stopped there, and trading for the day closed at 156.31 yen.

Today the USDJPY was lifted by yen selling as the Nikkei 225 extended its gains, reaching a high of 156.79 shortly after GMT 00:30. However, dollar selling erased those gains. As of GMT 04:30, the pair is trading in the lower 156-yen range.

Looking at the 1-hour chart of the USDJPY (as of GMT 04:30 on January 6), the pattern of higher lows has broken down, with the middle line now pointing downward. If the pair breaks below 156.11, the focus will shift to whether it will continue lower.

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

• GMT 14:45 U.S. December Services Purchasing Managers Index (PMI, revised)
• GMT 14:45 U.S. December Composite Purchasing Managers Index (PMI, revised)