USD/JPY: Upside could slow the pace near term – UOB

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, further upside in USD/JPY remains the most likely scenario for the time being, although a visit to 147.65 may have to wait for now.

Key Quotes

24-hour view: “Our expectations for USD to ‘breach 145.00’ yesterday did not materialize as it traded sideways between 143.30 and 144.55. The movement appears to be part of a consolidation and further sideway-trading would not be surprising. Expected range for today, 143.40/144.60.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (08 Sep, spot at 144.10). As highlighted, USD could continue to rally but deeply overbought conditions suggest a slower pace of advance and at this stage, the chance for USD to rise to the 1998 high near 147.65 is not high. On the downside, a breach of 142.50 (‘strong support’ level was at 142.20 yesterday) would indicate that the rally in USD is ready to take a pause.”