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In opinion of FX Strategists at UOB Group, the bias in USD/JPY remains tilted to the downside, albeit as part of the broad 107.00/109.00 trading range.

Key Quotes

24-hour view: “Our view for USD yesterday that it ‘could dip towards 107.70; next support at 107.40 is unlikely to come into the picture’. Our view was not wrong as USD subsequently dropped to a low of 107.49. Downward momentum has improved further and the risk for today is still on the downside. From here, barring a move back above 108.05 (minor resistance is at 107.85), USD is expected to weaken further towards 107.25. The strong support at 107.00 is likely out of reach for now.”

Next 1-3 weeks: “After rising quickly to a high of 109.37 last Monday (06 Apr), USD has not been able to make any headway on the upside as it subsequently traded sideways to lower for the rest of the week. The price action has resulted in a rapid loss in momentum and has put paid to our view for USD to test 110.40. From here, the bias is tilted to the downside but at this stage, any weakness is viewed as part of a 107.00/109.00 range.”