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FX Strategists at UOB Group commented that further downside is still expected around USD/JPY in the next weeks.

Key Quotes

24-hour view: “Our expectation for ‘the drop in USD to test 107.90 first before stabilizing’ did not materialize as it traded between 107.95 and 108.54 before closing little changed at 108.05 (-0.06%). The outlook for USD still appears to be on the soft side but any weakness is unlikely to challenge the major support at 107.65 (107.80 is already quite a strong level). Resistance is at 108.30 followed by 108.55.”

Next 1-3 weeks: “We continue to hold the same view from yesterday (20 Apr, spot at 108.15). As highlighted, USD is likely to weaken further but the major support at 107.65 may not come into the picture so soon. On the upside, a break of 108.85 (no change in ‘strong resistance’ level) would indicate that the pullback in USD that started about 2 weeks ago has run its course. Looking ahead, the next support below 107.65 is at 107.30.”