According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, USD/JPY is seen trading within 135.00/138.00 range for the time being.

Key Quotes

24-hour view: “Our view for USD to trade in range between 136.50 and 137.55 was incorrect as it plummeted to a low of 135.94 before settling at 136.14 (-0.87%). The sharp drop appears to be running ahead and while there is scope for USD to weaken, any decline is viewed as a lower trading range of 135.50/137.00. In other words, a sustained drop below 135.50 is unlikely.”

Next 1-3 weeks: “On Wednesday (08 Mar, spot at 137.30), we highlighted the surge in momentum is expected to lead to further USD strength, likely towards 138.20. USD subsequently rose to 137.91 before pulling back and yesterday, the pullback took out our ‘strong support’ level of 136.20. The breach of the ‘strong support’ indicates that USD is unlikely to advance further. USD appears to have entered a consolidation phase and it is likely to trade within a range of 135.00/138.00 for now.”