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FX Strategists at UOB Group remain bearish on USD/JPY and noted the probability of a move to 105.00 in the near-term.

Key Quotes

24-hour view: “The sudden and sharp plunge in USD that sent it a low of 105.96 came as a surprise. While severely oversold, the decline is not showing sign of stabilization just yet. From here, barring a move above 106.80 (minor resistance is at 106.50), USD could weaken further to 105.60.”

Next 1-3 weeks: “While we indicated yesterday (05 Mar, spot at 107.75) that ‘further USD weakness is not ruled out’, we were of the view the ‘odds for a sustained drop below 106.30 are not high’. However, USD abruptly nose-dived lower and hit an overnight low of 105.96 (aside from last Friday’s -1.38% 1-day drop, yesterday’s -1.26% decline is the largest since August last year). From here, the next support of note is not until 105.00 but it is left to be seen whether the current momentum can carry USD to this level. Meanwhile, volatility could remain elevated but only a break of 107.30 (‘strong resistance’ level was at 108.70 yesterday) would indicate that the current weakness has stabilized.”