USD/JPY consolidates as short-term stability contrasts with long-term downside risks

United Overseas Bank (UOB) strategist Quek Ser Leang has observed that the USD/JPY pair has been trading within a broad range, fluctuating between 156.94 and 158.21 before closing at 157.83. Intraday trading is expected to remain within the 157.10-158.10 band.

Looking ahead over the next 1-3 weeks, Quek now anticipates a consolidation phase for the dollar-yen pair, with a likely trading range of 156.35 to 158.70. This outlook shifts from earlier expectations of deeper pullbacks, suggesting a more stable trading environment in the near term.

However, over a longer horizon of 1-3 months, Quek warns of rapid downside momentum that could drive the pair toward the January low of 152.08. This contrasts with the short-term stability, highlighting potential volatility in the medium term.

In the latest 24-hour view, the USD rose to 158.45 before closing 0.43% higher at 158.07. Despite some intraday volatility, including a dip to 156.94, the pair rebounded to close at 157.83. Analysts expect USD/JPY to trade within a 157.10-158.10 range today.