FX Strategists at UOB Group now see USD/JPY moving into a rangebound phase in the near term.
24-hour view: “Expectation for USD to “test the 108.10” did not materialize as it traded in relatively quiet manner and within a narrow range of 108.28/108.66. The price action is viewed as part of a consolidation phase and USD is likely to continue to trade sideways for today, expected to between 108.35 and 108.80”.
Next 1-3 weeks: “While our ‘strong support’ level at 108.10 is still intact, the weak daily closing last Friday (108.42, -0.21%) is enough to indicate that the USD strength that started more than a week ago has run its course. The price action was not surprising as we cautioned last Friday (18 Oct, spot at 108.65) that the “odds for further USD strength have diminished”. From here, USD is likely to consolidate and trade sideways within a 107.80/109.00 range. Looking ahead, there is no pre-indication on which side of the trading range is more vulnerable”.