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A move to the sub-109.00 area in USD/JPY appears unlikely in the near-term, commented UOB Group’s FX Strategists.

Key Quotes

24-hour view: “The sharp decline in USD to 109.23 came as a surprise (we expecting USD to retest the resistance at 109.95). Despite the decline, downward momentum has barely improved. In other words, USD is unlikely to weaken further. For today, USD is more likely to trade sideways between 109.30 and 109.70.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (12 Apr, spot at 109.65). As highlighted, the downside risk in USD is still intact but waning downward momentum suggests the “chance for a sustained decline below 109.00 is not high”. However, only a break of 110.10 (‘strong resistance’ level was at 110.35 yesterday) would indicate that the downside risk has dissipated.”