Japanese Yen: Broad range against US Dollar holds despite volatility – UOB

USD/JPY offered little intraday directional clarity amid sharp swings, while lower US yields lent support to the Japanese Yen, according to United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann. The pair traded between 157.39 and 158.74 before settling at 158.42. The analysts expect an intraday range of 157.70–158.70 and retain their view that trading will remain range-bound between 157.00 and 159.00 over one to three weeks.

Will trading remain within a broad consolidation range?

"24-HOUR VIEW: After rising to a high of 158.76 on Tuesday, USD pulled back sharply in the early Asian session yesterday. When it was at 158.00, we highlighted that “the pullback could extend, but it is unlikely to reach 157.50.” We did not expect the ensuing volatility as USD plummeted to 157.39 and snapped back up to a high of 158.74. USD closed at 158.42 (-0.15%). We are not able to derive much from the price action. Today, USD could trade between 157.70 and 158.70."

"1-3 WEEKS VIEW: In our most recent narrative from last Wednesday (28 Oct, spot at 157.85), we highlighted that USD “has likely entered a range-trading phase,” and we expected “it to trade between 157.00 and 158.60.” After USD broke above 158.60 with a high of 158.76, we highlighted yesterday that “we continue to expect range-trading, but we now expect a wider range of 157.00/159.00.” Our view remains unchanged."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)