Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group note that the likelihood of USD/JPY advancing beyond the 133.00 hurdle now seems to have lost some momentum.

Key Quotes

24-hour view: “We expected USD to trade between 130.20 and 132.20 yesterday. We did not anticipate the sharp decrease in volatility as USD traded within a relatively narrow range of 130.59/131.53. The underlying tone has firmed but while USD is likely to edge higher, a break of 132.20 is unlikely. Support is at 131.00, followed by 130.65.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (08 Feb, spot at 130.90). As highlighted, while the outlook for USD is still positive, the prospect of it rising to 133.35 has decreased. Overall, only a breach of 130.20 (no change in ‘strong support’ level) would indicate that USD is not advancing further.”