Yesterday the USDJPY continued its soft trend, hitting a low of 157.74 yen shortly after GMT 12:30. However, as fears of escalating U.S.-Europe tensions eased, the dollar saw buying interest return, pushing the pair to a high of 158.53 yen around GMT 19:30, and trading for the day closed at 158.25 yen.

Today the USDJPY tilted toward yen selling amid concerns over Japan's worsening fiscal position, reaching a high of 158.70 yen around GMT 05:00. At the Bank of Japan's Monetary Policy Meeting, Governor Ueda is expected to maintain a cautious stance.

Looking at the 1-hour chart of the USDJPY (as of GMT 05:10 on January 22), the pair has broken above the January 20 high, with upward momentum strengthening. This appears to be a good time to shift from a bearish to a bullish outlook.

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

The main economic indicators for today are as follows:

• GMT 13:30 U.S. Real gross domestic product (GDP, revised), Q3
• GMT 13:30 U.S. PCE Price Index, Q3
• GMT 13:30 U.S. Core PCE Price Index, Q3
• GMT 15:00 U.S. November Personal Income
• GMT 15:00 U.S. November Personal Consumption Expenditures