In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, further decline in USDJPY should meet a solid support around 138.00 in the short term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rebound amid oversold conditions suggests USD is unlikely to weaken much further’ and we expected USD to ‘trade between 138.40 and 140.30’. USD subsequently traded in a wider range than expected (138.56/140.73) before closing at 139.88 (+0.79%). The underlying tone has improved somewhat and USD is likely to edge higher today but a break of 141.00 is unlikely. On the downside, support is at 139.90 but only a break of 139.40 would indicate that the current mild upward bias has subsided.”

Next 1-3 weeks: “Yesterday (14 Nov, spot at 139.05), we held the view that 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. There is no change in our view. On the upside, a break of the ‘strong resistance’ at 141.00 would indicate that USD is unlikely to weaken further.”