UOB Warns: USD/JPY Consolidation Ahead

The Japanese Yen (USD/JPY) remains vulnerable against the US Dollar, according to UOB's analysts Quek Ser Leang and Lee Sue Ann. The pair has been consolidating near 159.25 after Monday's sharp rise, with intraday trade expected between 158.95 and 159.60.

While momentum is strong, deeply overbought conditions limit the upside beyond 159.60. Over the next 1-3 weeks, the bias remains tilted to the upside within a broader 157.00-160.20 range.

The analysts note that medium-term gains are contingent on holding above the 21-day EMA (Exponential Moving Average). They also reiterate their previous warning that any advance is likely to stay within a specific range, with USD unlikely to break clearly above 159.60.