A breach of 114.75 could put USD/JPY under further downside pressure in the short-term horizon, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected USD to weaken yesterday, we were of the view that ‘a sustained drop below 115.20 appears unlikely’. The subsequent weakness exceeded our expectations as USD plunged to 114.83. The rapid drop appears to be overdone and USD is unlikely to weaken much further. For today, USD is more likely to trade between 114.75 and 115.25.”

Next 1-3 weeks: “We have held the same view since Monday (14 Feb, spot at 115.40) where USD is likely to trade between 114.75 and 116.05. After trading sideways for a few days, USD plunged to 114.83 during NY session. While downward momentum has improved, USD has to close below 114.75 before a sustained decline is likely. The chance for USD to close below 114.75 would remain intact as long as it does not move above 115.55 within these couple of days. Looking ahead, the next support below 114.75 is at 114.40.”