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In opinion of FX Strategists at UOB Group, USD/JPY is likely to move within a consolidative mood in the next weeks.

Key Quotes

24-hour view: “We highlighted last Friday that ‘the consolidation phase appears to be coming to an end and USD could drop towards 107.20’. We added, ‘the next support at 107.00 is unlikely to come into the picture’. While our view was not wrong as USD dropped to 107.06, the subsequent robust rebound came as a surprise (USD touched 107.89 during late-NY hours). The rapid swings have resulted in a mixed outlook and for today, USD could trade in a choppy manner between 107.20 and 108.00.”

Next 1-3 weeks: “USD came close to the bottom of our expected 107.00/108.00 range last Friday (29 May) before rebounding quickly. For now, we continue to hold the same view that USD is likely to trade sideways. As highlighted last Wednesday (27 May), only a daily closing out of the expected 107.00/108.00 range would suggest the start of a more sustained movement in USD.”