USD/JPY extends its consolidation from 127.53/27, but analysts at Credit Suisse look for only a temporary floor.

131.58 to be the first key resistance level

“We look for floor at 127.53/27 and a deeper recovery, given the large bullish divergence on short-term momentum indicators, and our view that US Yields can see a short-term reversal back into their range. We suspect this rebound will prove only temporary though and we look for a sustained break below 127.27 and then the 126.36 May 2022 low in due course, which should see weakness extend to the 61.8% retracement at 121.44.” 

“We consider 131.58 to be the first key resistance level, with 132.88 a good fade zone. Ultimately, 134.78 is expected to hold.”