USD/JPY remains under pressure for the time being, although a deeper pullback to the 137.00 region looks out of favour in the short term, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Yesterday, USD dropped sharply but briefly to 137.48 before rebounding strongly. Downward pressure has eased with the rebound and USD appears to have moved into a consolidation phase. In other words, USD is likely to trade sideways today, expected to be within a range of 138.20/139.30.”

Next 1-3 weeks: “In our latest narrative from last Thursday (24 Nov, spot at 139.20), we held the view that the risk for USD has shifted to the downside towards 137.70. Yesterday (28 Nov), USD dropped to 137.48 before rebounding. While further USD weakness is not ruled out, downward momentum has waned and this combined with oversold conditions suggests the chance of USD dropping to the next support at 137.00 is not high. Overall, only a break of 139.60 (‘strong resistance’ level) would indicate that USD is not weakening further.”