Yesterday the USDJPY touched a low of 158.19 yen shortly after the open, then traded with slightly firm momentum. Strong U.S. economic data released at GMT 13:30 pushed the pair to a high of 158.87 around GMT 14:00, but the gains did not extend, and trading for the day closed at 158.57 yen.

Today the USDJPY fell to a low of 157.96 around GMT 02:30, as comments from Finance Minister Katayama warning against yen weakness prompted yen buying. As of GMT 05:00, the pair is trading in the lower 158-yen range.

Looking at the 1-hour chart of the USDJPY (as of GMT 04:50 on January 16), the pair has paused its decline and rebounded, only to drop further. Until the pair breaks above 158.87 yen, selling rallies with a bearish outlook appears to be the effective strategy.

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

• GMT 14:15 U.S. December Industrial production
• GMT 15:00 U.S. January NAHB Housing Market Index