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According to FX Strategists at UOB Group, the upside momentum in USD/JPY has still further legs to go in the short-term.

Key Quotes

24-hour view: “We highlighted last Friday ‘there is room for USD to test the major resistance near 108.15’. We added, ‘a sustained rise above this level is unlikely’. While our view for a higher USD is correct, we did not expect the ease by which USD cracked 108.15 and surged to 108.63. The strong surge appears to be overdone but there is room for USD to retest the 108.60/65 level before a more sustained pullback can be expected. Overbought conditions suggest the resistance at 109.00 is unlikely to come into the picture. On the downside, a break of 108.00 would indicate the current upward pressure has eased.”

Next 1-3 weeks: “We have expected USD to move higher for more than a week now. In our latest narrative from last Friday (08 Mar, spot at 107.85), we highlighted that ‘strong boost in momentum is likely to lead to further USD strength to 108.15’. We added, ‘the next resistance above this level is at 108.60’. While our view is correct, the pace of the advance was faster than expected as USD surged to 108.63 during NY hours on Friday. Further USD strength still appears likely but overbought shorter-term conditions suggest 109.00 may not come into the picture so soon. Overall, the current positive outlook is deemed intact as long as USD does not move below 107.35 (‘strong support’ level was at 106.95 last Friday).”