United Overseas Bank’s (UOB) economists Quek Ser Leang and Lee Sue Ann see USD/JPY edging higher in the near term after rebounding from oversold levels, but expects gains to be limited below 159.60. On a 1–3 week horizon, they still look for another test of 157.50 as long as 159.60 holds as strong resistance. A break below 158.65 would signal renewed range trading.

Limited upside as downside risk persists

"Today, we expect USD to edge higher, but any advance is unlikely to threaten the strong resistance at 159.60 (there is another resistance level at 159.35)."

"Support is at 158.90; a breach of 158.65 would mean that USD has moved into a range-trading phase."

"After USD dropped to 157.86 and then rebounded, we highlighted yesterday (09 Apr, spot at 158.60) that “oversold short-term conditions could lead to a couple of days of range-trading, but as long as 159.60 (‘strong resistance’ level) is not breached, there is a chance for USD to test 157.50.” There is no change in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)