United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann describe USD/JPY as locked in a range-trading phase, with a slightly firmer tone keeping the pair in a higher intraday band of 158.80–159.45. Their 1–3 week view is now neutral after earlier downside bias faded, and they expect the pair to oscillate between 157.90 and 159.80 rather than extend losses in the near term.

Neutral bias within defined band

“24-HOUR VIEW: USD traded between 158.33 and 159.13 last Friday, closing little changed at 158.93 (-0.08%). When USD was at 158.95 yesterday, we stated that “the price action provides no fresh clues.” We added that USD “could trade between 158.55 and 159.30.” USD subsequently traded within a range of 158.59/159.28 and closed little changed at 159.08 (+0.09%). The price action appears to be part of a rangetrading phase, but the firmer underlying tone suggests USD is likely to trade in a higher range of 158.80/159.45 today.”

“1-3 WEEKS VIEW: We revised our USD view to slightly negative last Thursday (20 Aug, spot at 158.30). We highlighted that “downward momentum is starting to build, but it is insufficient for a sustained decline.” We also highlighted that USD “could edge lower, but any decline should be contained within a 156.60/159.60 range.” Since then, USD traded mostly in a range, and the build-up in downward momentum has faded. From here, instead of edging lower, USD is more likely to trade in a range between 157.90 and 159.80.”