On Friday of last week the USDJPY maintained the 159-yen range, with safe-haven dollar buying dominant amid concerns over a prolonged Middle East conflict. Position adjustments briefly pushed the pair lower, hitting a low of 159.00 shortly after GMT 13:30, but it fully recovered those losses and trading for the day closed at a high of 159.74 around GMT 20:30.

Today the USDJPY opened with a gap down, touching a low of 159.25 around GMT 00:30. However, concerns over a potential closure of the Strait of Hormuz prevented further downside, and as of GMT 04:00 the pair had recovered to around 159.50.

Looking at the 1-hour chart of the USDJPY (as of GMT 04:20 on March 16), the pair made higher highs while forming pullbacks along the way. A break above 159.74 could open the door to a move toward the 160-yen level. Should it reach that key level, there is the possibility of a sharp but temporary pullback.

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

The main economic indicators for today are as follows:

• GMT 12:30 U.S. March NY Empire State Manufacturing Index
• GMT 13:15 U.S. February Industrial production (MoM)
• GMT 14:00 U.S. March NAHB Housing Market Index