In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, further upside in USD/JPY could revisit the 147.00 yardstick and above.

Key Quotes

24-hour view: We indicated yesterday that USD could edge higher. However, we were of the view that “a sustained break above 147.00 is unlikely.” Our view was not wrong, as USD edged higher and eked out a fresh 9-1/2-month high of 146.74. Unsurprisingly, the advance lacks momentum, and USD is unlikely to rise much further. Today, we expect USD to trade in a range, likely between 145.90 and 146.70. 

Next 1-3 weeks: There is not much to add to our update from yesterday (28 Aug, spot at 146.45). As highlighted, the recent price actions resulted in a slight increase in upward momentum. There is room for USD to grind higher to 147.00, possibly 147.50. The mild upward pressure is intact as long as USD stays above 145.35 (‘strong support’ level was at 145.20 yesterday).