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FX Strategists at UOB Group noted extra gains in USD/JPY now look under pressure.

Key Quotes

24-hour view: “Our expectation for USD to ‘grind higher to 109.50’ was incorrect as it fell sharply to an overnight low of 108.40 (high has been 109.23). Upward momentum has more or less dissipated and the current movement is viewed as part of a consolidation phase. In other words, USD is expected to trade sideways, likely within a 108.30/108.95 range.”

Next 1-3 weeks: “We have expected USD to move higher for more than a week now. In our latest narrative from yesterday (09 Mar, spot at 109.10), we held the view that ‘the outlook for USD is still clearly positive and the next level to focus on is at 109.85’. USD subsequently rose to a fresh high of 109.23 but the advance was short-lived as it fell sharply to an overnight low of 108.40. Rapid loss in shorter-term momentum has diminished the odds for further USD strength but only a break of 108.00 (no change in ‘strong support’ level) would indicate that 109.23 is the extent of the current positive phase in USD.”