Yen: Trades in 157.90-159.80 Range vs Dollar – UOB

UOB FX strategists Quek Ser Leang and Lee Sue Ann noted that USD/JPY is in a range-trading phase with a slightly firm near-term bias. As of writing, the pair was trading near 159.35, holding within a 158.59-159.28 intraday range, extending the recent upward oscillation trend.

**Short-term range shifts higher, focus on upside resistance**

The analysts described the current state as a "range-trading phase" but emphasized that a slightly stronger tone is pushing the pair into a higher intraday range. They expect USD/JPY to fluctuate between 158.80 and 159.45 in the near term. This view aligns with market action, as the pair edged higher in early trading and continued to consolidate above the 159.00 level, indicating some underlying support.

**Macro backdrop provides support**

The recent resilience of USD/JPY mainly stems from persistently high US-Japan yield differentials and cooling expectations of aggressive policy tightening by the Bank of Japan in the near term. Despite occasional verbal intervention signals from Japanese authorities, the lack of concrete action has kept yen bulls cautious. In this context, the pair has become more sensitive to yield-driven moves, with mildly dollar-positive news sufficient to push it toward the upper end of the range.

**Outlook and risk points**

The UOB analysis team did not provide a clear directional forecast for a breakout, but the current firm tone suggests that a sustained hold above 159.45 could open room for further upside. Conversely, 158.80 on the downside and the more critical 158.59 (intraday low) will offer short-term support. Markets are closely watching upcoming US economic data and Federal Reserve officials' speeches for fresh clues on the rate path, which will be the key variable in breaking the current range balance.