The continuation of the upside bias could propel USD/JPY to the 135.00 region ahead of 135.50, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We noted yesterday that ‘upward has firmed slightly’ and we expected USD to edge higher. However, we were of the view that ‘the major resistance at 134.00 is unlikely to come into view’. The anticipated USD strength exceeded our expectations as USD soared above 134.00 (high of 134.35) before pulling back. Despite the pullback, upward momentum is still strong and there is room for USD to rise above 134.35. However, the major resistance at 135.00 is likely out of reach today. Support is at 133.55, followed by 133.20.”

Next 1-3 weeks: “Yesterday (14 Feb, spot at 132.90), we highlighted that ‘upward momentum appears to be building and there is room for USD to edge higher’. We added, ‘the major resistance at 134.00 might not come into view so soon’. While our view for USD to strengthen was correct, we did anticipate the rapid acceleration in pace as USD surged to a high of 134.35. Not surprisingly, upward momentum has improved further and USD is likely to continue to advance. The next level to watch is at 135.00, followed by 135.50. On the downside, a break of 132.40 (‘strong support’ level was at 131.40 yesterday) would indicate that the current upward pressure has eased.”