Bets for USD/JPY to slip back to the 131.65 level now appear diminished, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We held the view yesterday that USD ‘is likely to edge lower but is unlikely to threaten the support at 132.40’. Our view was not wrong as USD dropped to 132.54 before rebounding. Downward momentum has eased and USD is likely to consolidate for today, expected to be within a range of 132.60/133.70.”

Next 1-3 weeks: “Our latest narrative was from last Thursday (11 Aug, spot at 132.85) where USD could consolidate for a couple of days first before declining to 131.65. Since then, USD has not been able to make much headway on the downside. Downward momentum is beginning to wane and the odds for USD to decline to 131.65 have diminished. However, only a break of 134.00 (‘strong resistance’ level was at 134.40 yesterday) would indicate that the downside risk has dissipated.”