In view of FX Strategists at UOB Group, USD/JPY should remain consolidative for the time being.
24-hour view: “While our view that USD “could test 108.00 but a move below 107.75 is unlikely” was not incorrect, the subsequent surge from a low of 107.85 came as a surprise. The rapid and robust rebound has scope to extend higher but at this stage, a sustained move above 108.95 is not expected. Support is at 108.35 but the stronger level is at 108.15. The 107.85 low is not expected to come into the picture”.
Next 1-3 weeks: “Our view from yesterday (10 Jul, spot at 108.90) wherein USD is expected to move to 109.30 was proven wrong quickly as it plummeted after touching a 5-week high of 108.98. The rapid drop took out the 108.35 ‘key support’ (overnight low of 108.33). From here, USD is deemed to have moved into a sideway-trading phase and is likely to trade within a relatively broad range of 107.50 and 108.95”.