The weak phase in USD/JPY appears to have ended, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that the outlook for USD is mixed and we expected it to ‘trade between 107.50 and 108.20’. USD subsequently traded within a narrower range than expected (107.63/108.19). USD traded on a firm note upon opening in Asia and the bias is tilted to the upside towards 108.40. A breach of this strong resistance is not ruled out but the next resistance at 108.75 is not expected to come into the picture. Support is at 108.00 followed by 107.80.”

Next 1-3 weeks: “Yesterday (26 Apr, spot at 107.85), we highlighted that ‘there is chance for USD to move lower to 107.30’. We added, ‘a break of the ‘strong resistance’ at 108.40 would indicate that the weak phase has run its course’. USD subsequently rebounded and while 108.40 is still intact; the rapid loss in momentum suggests that the weak phase that started three weeks ago has run its course. The current movement is viewed as the early stages of a consolidation phase even though the bias is for USD to test the top of the expected 107.60/108.75 range first.”