In opinion of FX Strategists at UOB Group, USD/JPY could now extend the upside to the 106.70 region in the near-term.
24-hour view: “Yesterday, we held the view that USD ‘could break last week’s peak near 106.20 but the next resistance at 106.70 is likely out of reach’. Our view was not wrong as USD eased off after rising to 106.40. Further USD strength appears unlikely. For today, USD is more likely to consolidate and trade between 105.80 and 106.40.”
Next 1-3 weeks: “We highlighted yesterday that risk has shifted to the upside and USD ‘could advance to 106.20, possibly 106.70’. USD subsequently rose to 106.40. Upward momentum has improved and the focus now is at 106.70. Only a break of 105.40 (‘strong support’ level was at 105.20 yesterday) would indicate that USD is unlikely to strengthen further.”