USD/JPY continued to find a base at 113.50 before reversing higher towards the 114.00 area with Wall Street's main indexes rising sharply ahead of the closing bell late Monday. Economists at OCBC Bank expect the pair to remove the 113.50 support on another leg lower for equites.

Equity-led decline has not fully played out

“The baseline expectation is that the equity-led decline has not fully played out.” 

“Should there be another clear leg lower for equities, expect the 113.50 support to be breached and the downside target shifts to 112.60.”