According to Lee Sue Ann and Quek Ser Leang, FX Strategists at UOB Group, bets for a breach of the 127.50 level in USD/JPY appear to be losing impulse so far.

Key Quotes

24-hour view: “USD traded sideways between 128.68 and 129.63 yesterday before closing largely unchanged (129.16, -0.02%). The price actions are likely part of a consolidation and USD could continue to trade sideways. Expected range for today, 128.70/129.65.”

Next 1-3 weeks: “Our latest narrative was from last Thursday (12 May, spot at 128.80) where USD is likely to trade above 127.50 for a couple of days before staging a deeper pullback. USD traded mostly sideways the last couple of days. Downward pressure is easing and the chance for USD to move below 127.50 has diminished. That said, only a breach of 129.90 would indicate that the downside risk has dissipated.”