In opinion of FX Strategists at UOB Group, USD/JPY is expected to keep the consolidative mood in place for the time being.
24-hour view: “USD reversed an initial sharp drop to 103.08 before surging back up to an overnight high of 106.08. The choppy swing has resulted in a mixed outlook and USD could continue to trade in a volatile manner for today, likely between 103.50 and 106.80.”
Next 1-3 weeks: “After plunging by -2.81% on Monday, USD rocketed back up and closed higher by a staggering +3.21% (NY close of 105.63). Such back-to-back outsized move of opposite directions is rare. The break of our ‘strong resistance’ at 105.00 indicates that the weak phase in USD that started in late February (see annotations in chart below) has ended in an abrupt manner. From here, USD could continue to whipsaw within a broad range. Only a clear break below 101.00 or above 109.00 would indicate it is ready to start on a directional move.”