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USD/JPY is still expected to inch higher in the next weeks, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “As with yesterday’s update, the immediate risk continues to be on the downside. That said, the move looks increasingly stretched although a further move to 109.50 would not come as a surprise. A sustained push below the strong support at 109.30 is not expected at this juncture. Resistances are at 110.05 and 110.20 and only a move above the latter would indicate that the downside pressure has eased.”

Next 1-3 weeks: “After breaking above the major 109.75 resistance earlier last week, the gain made by USD has been relatively modest as it touched 110.28 last Friday. Despite the lack of ‘urgency’ after breaking a major resistance, the risk is still clearly on the upside. However, the lackluster price action suggests the prospect for a sustained rise above the next strong resistance at 110.67 is not high. On the downside, only a breach of 109.45 (no change in ‘strong support’ level) would indicate the current USD strength has run its course.”