Yesterday the USDJPY saw the dollar buying that had continued on the back of Middle East tensions ease off, resulting in a soft performance. Shortly after GMT 14:00, it hit a low of 158.85, before rebounding briefly to the 159.3 range, and trading for the day closed at 159.06.

Today the USDJPY saw yen selling spread after Bank of Japan Governor Kazuo Ueda made comments to the effect that the Bank would increase its Japanese government bond purchases to keep a lid on rising yields, with the pair hitting a high of 159.45 shortly after GMT 01:00. However, the pair failed to push higher and pulled back, trading softly in the 159.2 range as of GMT 05:00.

Looking at the 1-hour chart of the USDJPY (as of GMT 05:00 on March 17), there is no clear directional bias on this timeframe, though the pair is in a pullback phase after reaching +2 standard deviations. A clear break below 158.85 would likely shift the outlook to the downside.

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

The main economic indicators for today are as follows:

• U.S. Federal Open Market Committee (FOMC) Day 1
• GMT 14:00 U.S. February Pending Home Sales