Outlook for USD/JPY remains mixed – UOB

UOB Group’s FX Strategists noted USD/JPY could navigate within the 102.50-103.65 range in the short-term horizon.

Key Quotes

24-hour view: “Our expectation for USD to ‘weaken further’ was wrong as it rebounded strongly to an overnight high of 103.44 before easing off to close at 103.04. While downward pressure has dissipated, it is too early to expect USD to move higher in a sustained manner. From here, USD is more likely to trade sideways between 102.70 and 103.45.”

Next 1-3 weeks: “We highlighted yesterday (06 Jan, spot at 102.65) that ‘there is room for USD to weaken to 102.30, possibly 102.00’. Our expectation was proven wrong quickly as USD bounced and cracked our ‘strong resistance’ level at 103.35 (high of 103.44). The price actions have resulted in a mixed outlook and USD could trade between 102.50 and 103.65 for a period of time.”