Peter Chia and Quek Ser Leang, FX Strategists at UOB Group, noted that further upside could encourage USD/JPY to revisit the 131.25 level in the next weeks.

Key Quotes

24-hour view: “Our expectations for USD to consolidate were incorrect as it soared to a high of 130.55. Further USD strength would not be surprising but last week’s high near 131.25 is unlikely to come under threat for now (there is another resistance at 130.85). Support is at 130.10 followed by 129.90.”

Next 1-3 weeks: “Our view from yesterday (05 May, spot at 129.15) where the ‘pullback in USD could extend to 128.30’ was proven wrong quickly as it soared above our ‘strong resistance’ level at 130.15. Upward momentum has improved and there is room for USD to retest the 131.25 level (last week’s high). Only a breach of 129.60 (‘strong support’ level) would indicate that the build-up in momentum has eased.”