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USD/JPY is currently trading at 105.55, up 0.18% on the day, recovering from multi-month lows of 105.12 reached on Monday. Terence Wu, an FX strategists at OCBC Bank, expects the pair to experience some consolidation with the target set at the 105.00 mark.  

Key quotes

“A clean break of the 106.00 support suggests that the USD/JPY is likely to remain depressed if it cannot reclaim that level. However, the pair is at the lower end of the tolerance range of the short-term implied valuation. This suggests some consolidation may be at hand.” 

“For now, the near-term target remains at 105.00/20, while the cap comes in at 106.00/20.”