USD/JPY: Range Trading Unchanged – UOB

UOB FX strategists Quek Ser Leang and Lee Sue Ann note that USD/JPY remains in a range-bound consolidation pattern, with a neutral overall stance. The pair is currently trading around 159.59, having previously held within a narrow range near 159.35.

**Short-Term Momentum Slightly Firmer but Limited**

Analysts suggest that upside momentum has improved slightly, but this is more likely to translate into range trading between 159.15 and 159.65 rather than a sustained rally. This implies that while buying pressure has accumulated, resistance above remains solid, making a clear breakout difficult in the near term.

**Neutral Outlook for Coming Weeks**

Looking ahead, UOB maintains a neutral view on USD/JPY, expecting the pair to fluctuate within a wider range of 157.90 to 159.80. This forecast range is broader than the short-term view, reflecting analysts' belief that market forces are relatively balanced and that more catalysts are needed to trigger a decisive directional move. Recent discussions about potential intervention by Japanese authorities, coupled with uncertainty over the Fed's policy path, have created a backdrop that keeps the pair trapped between two forces.

**Key Levels in Focus**

The pair is now approaching the upper end of the short-term range, with the 159.65 level serving as a key focus. A break above could open the door toward 159.80 resistance; conversely, a fall below 159.15 might lead to a retest of the 158.00 support level. However, UOB believes that any directional breakout at this stage is unlikely to be sustained, and range trading remains the dominant strategy in the near term.