Yen: Slightly Bullish vs Dollar in Wide Range – UOB

USD/JPY has entered a consolidation phase in the short term following recent volatility. According to the latest view from market strategists at United Overseas Bank (UOB), the pair's failure to gain fresh directional cues after trading within a 158.33 to 159.13 range suggests intraday trading may be confined to a narrow band of 158.55 to 159.30. At the time of writing, USD/JPY was trading near 159.19, at the upper end of the projected range.

**Insufficient Upside Momentum, Breakout Needs Confirmation**

Despite USD/JPY's firm rebound from around the 158.00 level to the 159.00 area, UOB analysts believe this upside momentum is not yet sufficient to support a sustained uptrend. According to the bank's FX strategists Quek Ser Leang and Lee Sue Ann, after the pair traded within a 158.82 to 159.59 range, upside momentum has only increased slightly, and the market still awaits clearer breakout signals. This implies that current trading near 159.19 reflects more of a fluctuation at the upper end of the range rather than a trend-driven strengthening.

**Near-Term Outlook: Range-Bound Trading, Yen Slightly Firmer**

Looking ahead over the coming weeks, UOB strategists expect USD/JPY to potentially enter a broader consolidation range, roughly oscillating between 157.55 and 160.50. Against this backdrop, the bank holds a "slightly bullish" bias on the yen's near-term prospects, suggesting mild downside risks for USD/JPY. Investors should closely monitor the pair's performance at the boundaries of the aforementioned consolidation range, as a decisive break on either side could provide clear direction for the next phase of movement. Overall, in the absence of major catalysts, the market is awaiting fresh fundamental cues to break the current stalemate.