USD/JPY: A move to 137.50 now appears on the cards – UOB

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, further upside pressure could lift USD/JPY to the 137.50 region in the next weeks.

Key Quotes

24-hour view: “The strong surge in USD to a high of 136.70 came as a surprise (we were expecting sideway-trading). While overbought, the rally has scope to extend even though a clear break of 137.00 appears unlikely. On the downside, a breach of 135.55 (minor support is at 135.85) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “Two days ago (20 Jun, spot at 135.20), we highlighted that upside risk is building but USD has to close above 136.00 before a sustained advance is likely. We did not expect the ease by which USD jumped above 136.00 and surged to 136.70. Upward momentum remains strong and USD could rise further to 137.00, as high as 137.50. The upside risk is intact as long as USD does not move below 135.00 (‘strong support level was at 133.90 yesterday).”