Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group suggest USD/JPY could edge higher and surpass the 134.00 barrier in the near term.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘The sharp and swift rise has room to extend but deeply overbought conditions suggest a sustained rise above 133.50 is unlikely’. USD subsequently traded in a relatively quiet manner between 132.19 and 132.96. In early Asian trade, USD/JPY rose above 133.00. Today, a break of 133.50 will not be surprising but the major resistance at 134.20 could be just out of reach. Support is at 132.80, followed by 132.40.”

Next 1-3 weeks: “Our update from yesterday (30 Mar, spot at 132.60) still stands. As highlighted, the recent USD weakness has ended. The current rebound in USD could extend to 134.20. At this stage, a sustained rise above this level is unlikely. Overall, the current upside pressure will remain intact as long as USD stays above 131.70 (‘strong support’ level was at 131.20 yesterday).”