USD/JPY could likely embark on further consolidation ahead of potential extra gains in the next few weeks, note Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.

Key Quotes

24-hour view: “Yesterday, USD traded between 133.91 and 134.54, narrower than our expected sideways trading range of 133.80/134.80. Further sideways trading appears likely, even though the slightly firmed underlying tone suggests a higher range of 134.00/134.80.”

Next 1-3 weeks: “We continue to hold the same view as yesterday (20 Feb, spot at 134.35). As highlighted, USD could consolidate for a couple of days before heading higher to the next target at 135.50. On the downside, a break of 133.30 (‘strong support’ level was at 133.10 yesterday) would indicate that the USD strength that started in the middle of last week has come to an end.”