Yen: Maintains Bearish Bias Against USD in Narrow Range – UOB

USD/JPY is currently trading near 159.5933, maintaining an overall narrow consolidation pattern. UOB analysts Quek Ser Leang and Lee Sue Ann note that after the pair traded within the 158.82–159.59 range, momentum has picked up slightly but remains insufficient to signal the start of a sustained upward move, with intraday price action likely to stay confined to the 159.00–159.80 range.

**Short-term momentum mild, but direction unclear**

The analysts state that it is difficult to draw clear conclusions from recent price action. In the previous trading session, USD/JPY moved within an extremely narrow range of 159.01–159.56, closing roughly flat. Although the underlying tone appears firm, upward momentum has not yet accumulated to a level sufficient to drive a breakout move. According to UOB's view, intraday trading is more likely to see range-bound fluctuations, with an expected trading band of 159.00–159.70.

**1–3 week outlook: biased to upside but limited room**

Extending the horizon to 1–3 weeks, UOB maintains a bearish bias on the yen (i.e., an upward bias for USD/JPY). However, the analysts emphasize that any advance is likely to be part of a broader range-bound move rather than the start of a new trend. The currently projected narrower range of 158.00–160.20 is sufficient to cap price fluctuations. Longer-term charts suggest that as long as the pair holds above the 21-day exponential moving average (EMA) near 161.00, the upward momentum could persist.

**Market backdrop: mixed bullish and bearish factors**

Market reports indicate that USD/JPY is struggling to find clear direction amid heightened uncertainty over U.S. monetary policy. On one hand, rising crude oil prices have lifted U.S. inflation expectations, which in turn has boosted expectations of higher interest rates, providing downside support for the dollar; on the other hand, lingering expectations of additional rate hikes by the Bank of Japan have kept investors cautious about expanding short yen positions. This tug-of-war between bullish and bearish forces has left the exchange rate stuck around the 159.00 level.