Japanese Yen poised to extend gains against US Dollar - UOB

Falling US Treasury yields and geopolitical tensions drove a surge in safe-haven demand for the Japanese Yen (JPY), prompting a sharp USD/JPY sell-off, according to United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann. Despite oversold conditions, the near-term decline is expected to extend towards 156.00. Both the 1–3 week and 1–3 month outlooks highlight rapidly strengthening downward momentum, with further losses likely and support at 156.00 and 155.50, although a move to 152.08 remains uncertain.

Yen strengthens as downward momentum accelerates

"24-HOUR VIEW: We expected USD to “trade between 157.90 and 158.50” yesterday. We did not expect the steep decline that sent USD to a low of 156.67. USD closed at 156.76 (-0.87%), and it continued to decline in the early Asian session today. While deeply oversold, the decline could extend to 156.00 before stabilisation can be expected. The next support at 155.50 is likely out of reach for now. To sustain the downward momentum, USD must not break above 157.30, with minor resistance at 156.95."

"1-3 WEEKS VIEW: Last Wednesday (14 Oct, spot at 158.35), we highlighted that USD “has likely moved into a range-trading phase between 157.50 and 159.05.” Yesterday (22 Oct, spot at 158.20), we stated that “we continue to expect range-trading, but a narrower range of 157.70/158.80 is likely sufficient to hold the price movements for now.” In a sudden sharp move, USD plunged to a low of 156.67. The rapid increase in downward momentum suggests USD is likely to decline further. Support levels are 156.00 and 155.50. On the upside, a break above 157.80 would mean that USD is not declining further."

(This article was prepared with assistance from an Artificial Intelligence tool and reviewed by an editor. Find out more.)