According to FX Strategists at UOB Group, further upside in USD/JPY to the mid-108.00s looks unlikely for the time being.
24-hour view: “We highlighted last Friday USD “could advance further but any up-move is viewed as a higher trading range of 107.80/108.30”. USD subsequently traded between 107.90 and 108.26 before opening with a gap lower early this morning. The price action suggests 108.26 is likely a temporary top and USD could trade below this level for a couple of days. For now, the weak opening this morning could lead to a dip below 107.50 but the next support at 107.20 is not expected to come into the picture. Resistance is at 108.00 followed by 108.25”.
Next 1-3 weeks: “USD eked out a fresh 1-1/2 month high of 108.26 last Friday (13 Sep) before ending the day little changed at 108.07 (-0.01%). However, USD gapped lower upon opening this morning on the back of news of drone attack on Saudi oil facilities. While our 107.20 strong support is still intact, the price action has dented the upward momentum and the prospect for the rebound that started on 06 Sep (spot at 107.00) to extend to 108.50 has diminished. In order to revive the flagging momentum, USD has to move and stay above 108.25 within these few days or a break of 107.20 would not be surprising”.