Further upside in USD/JPY looks likely and with the immediate target at 135.75, note UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: “Yesterday, we held the view that USD ‘could test the 135.15 level before the risk of a more sustained pullback increases’. However, USD pulled back directly to a low of 134.00. The pullback in USD could extend but a break of the strong support level at 133.50 is unlikely. On the upside, a breach of 134.75 (minor resistance is at 134.40) would indicate that USD is not weakening further.”

Next 1-3 weeks: “Our update from yesterday (20 Apr, spot at 134.65) still stands. As highlighted, the bias is still towards a higher USD. The next level to aim for is a 135.75. Overall, only a break of 133.50 (no change in ‘strong support’ level) would indicate that the USD strength that started on Monday (17 Apr, spot at 133.80) has run its course.”