In opinion of FX Strategists at UOB Group USD/JPY could grind lower to the 109.00 region in the near-term.
24-hour view: “We highlighted yesterday that ‘there is scope for the weakness in USD to test 109.55 first before stabilization can be expected’. USD subsequently dipped to 109.56 before trading sideways for the rest of the sessions. The current movement is viewed as part of a consolidation and for today, USD is expected to trade between 109.50 and 110.00.”
Next 1-3 weeks: “There is not much to add to our update from yesterday (07 Apr, spot at 109.75). As highlighted, in view of the vastly improved downward momentum, the current pullback in USD could extend to 109.05. The corrective pullback is deemed intact as long as USD does not move above 110.55 (no change in ‘strong resistance’ level). That said, oversold shorter-term conditions could lead to a couple of days of consolidation first.”