The continuation of the decline in USD/JPY is seen facing tough contention in the 138.00 region in the near term, suggested Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “USD plunged to a low of 138.45 in late NY trade last Friday before rebounding. The rebound amid oversold conditions suggests USD is unlikely to weaken much further. For today, USD is more likely to trade between 138.40 and 140.30.”

Next 1-3 weeks: “Last week, USD lost a whopping 5.32%, its largest 1-week drop since 2008. While further USD weakness is not ruled out, any further decline is likely to be at a slower pace and the major support at 138.00 is expected to offer solid support. On the upside, a break of the ‘strong resistance’ at 141.00 would indicate that USD is unlikely to weaken further.”