Yesterday the USDJPY found a low of 158.27 shortly after the open, then held firm before reaching a high of 159.19 shortly after GMT 17:00, after which a sharp wave of dollar selling sent it tumbling back to the 158.3-yen range. Reports had circulated that the U.S. was seeking a one-month ceasefire as a precondition for opening talks with Iran. Trading for the day closed at 158.65 yen.

Today the USDJPY has been buoyed by a combination of short covering following yesterday's sharp drop and a hawkish stance from Iran regarding ceasefire talks, with the pair trading firmly in the 158.8-yen range as of GMT 04:00.

Looking at the 1-hour chart of the USDJPY (as of GMT 04:30 on March 25), the pair is trending modestly higher after bottoming out on this timeframe, and the outlook remains tilted to the upside as long as 158.36 yen holds. The key near-term question is whether the pair can break above 159.19 yen.

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

The main economic indicators for today are as follows:

• GMT 12:30 U.S. Current account Q4