Further upside momentum could lift USD/JPY to the 140.00 region in the next weeks, commented FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “While we expected USD to strengthen yesterday, we were of the view ‘a sustained rise above 138.00 is unlikely’. We did not anticipate that sharp upward acceleration as USD surged to a high 139.39. While overbought, the rapid rise is not showing signs of weakening just yet. In other words, USD could continue to advance to 139.50. The major resistance at 140.00 is unlikely to come into the picture for now. Support is at 138.60 followed by 138.30.”

Next 1-3 weeks: “We turned positive USD 3 days ago (12 Jul, spot at 137.20) and we indicated that USD could advance further to 138.00, as high 138.50. While our view for a higher USD was not wrong, we did not quite expect the rapid manner by which it surged past both 138.00 and 138.50 yesterday and rocketed to a high of 139.39. The boost in upward momentum suggests further USD strength is likely. The next levels to focus on are at 139.50 followed by the major round-number level of 140.00. On the downside, a break of 137.50 (‘strong support’ level was at 136.30 yesterday) would indicate that the current strong upward pressure has eased.”