In opinion of FX Strategists at UOB Group, a sustainable deeper pullback in USD/JPY looks unlikely for the time being.
Key Quotes
24-hour view: “As mentioned yesterday, signs are showing that downside momentum is abating. USD touched a low of 105.51 before sharply reversing to as high as 107.07. Despite the sharp rebound, it is unclear whether USD has made its interim low at 105.51. In the meantime, expect a wide and volatile range between 105.40 and 107.55 for today”.
Next 1-3 weeks: “In our previous report (2-Aug, spot 107.45), we cited a further risk of markets ‘repositioning for a lower USD/JPY going forward’ and that a NY close below 107.00 would warrant a ‘negative phase’ for USD (closing price on Fri: 106.58). Here, price action is likely to stay volatile and should USD drops below 106.00, key support at 105.50 and Jan’s flash crash low of 104.96 would
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