USD/JPY is still expected to keep the 108.50-109.55 trading range in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we expected USD to ‘trade sideways between 109.00 and 109.55’. Our expectations were incorrect as USD dropped to 108.82 before rebounding. The rapid drop appears to be running ahead of itself and further sustained USD weakness is not expected. For today, USD is more likely to consolidate and trade between 108.80 and 109.30.”

Next 1-3 weeks: “We have held the same view since Monday (17 May, spot at 109.35) where USD ‘is likely to consolidate and trade between 108.50 and 109.95’. While the shorter-term underlying tone has weakened somewhat, the prospect for USD to break 108.50 is not high. Meanwhile, a 108.50/109.55 range is likely enough to contain the price actions in USD, at least for a few days.”