Extra gains could lift USD/JPY back above the 140.00 level in the near term according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected USD to ‘trade sideways between 138.10 and 139.10’ yesterday. USD subsequently traded between 138.25 and 139.00 before closing at 138.96. USD soared above 139.00 during early Asian hours. The rapid improvement in momentum is likely to lead to further USD strength towards 140.00. A breach of this major resistance is not ruled out. The next resistance is at 140.50. The upside risk is intact as long as USD does not move below 139.60 (minor support is at 138.90).”

Next 1-3 weeks: “We turned positive USD early this week. In our latest narrative from yesterday (31 Aug, spot at 138.65), we indicated that the outlook for USD is still positive but the major resistance at 139.50 may not come into the picture so soon. USD subsequently closed at 138.96 before jumping above 139.00 during early Asian hours today. The surge in momentum suggests that USD could advance to 140.00, 140.50. On the downside, a breach of 138.00 (‘strong support’ level was at 137.40 yesterday) would indicate that USD is unlikely to advance further.”