In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, bouts of weakness in USD/JPY should meet quite a solid support in the 133.00 neighbourhood.

Key Quotes

24-hour view: “After USD dropped to 133.49 and rebounded, we highlighted last Friday that ‘the rebound in deeply oversold conditions suggests that USD is unlikely to weaken much further’ and we expected USD to trade in range between 133.40 and 135.00. While USD did not weaken further, it did not quite trade in a range as it rebounded strongly to 135.12. The rebound has scope to extend but any advance is not expected to break the strong resistance at 136.05 (there is another resistance level at 135.55). Support is at 134.65, followed by 134.20.”

Next 1-3 weeks: “Last Friday (05 May, spot at 134.05), we indicated that ‘while USD could continue to decline, short-term conditions are severely oversold and it remains to be seen if USD has enough momentum to break the solid support level near 133.00’. There is no change in our view. On the upside, a breach of 136.05 (no change in ‘strong resistance’ level0 would suggest that the weakness in USD has stabilized.”