Further upside in USD/JPY could surpass the 134.00 barrier in the newxt weeks, note UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang.

24-hour view: “We highlighted yesterday that USD ‘downward momentum has waned with the rebound and USD is unlikely to weaken further’ and we expected USD to trade in a range between 130.70 and 131.75. Instead of trading in a range, USD soared to a high of 132.88 before closing on a strong note at 132.84 ( 1.51%). The sharp and swift rise has room to extend but deeply overbought conditions suggest a sustained rise above 133.50 is unlikely. The next resistance level of note is at 134.20. On the downside, 132.00 is a solid support (there is a minor support at 132.30).”

Next 1-3 weeks: “We have held a negative USD view since early last week. In our update from yesterday (29 Mar, spot at 131.10), we highlighted that ‘downward momentum is waning rapidly and the risk of USD bottoming is increasing’. However, we did not quite expect the manner in which USD jumped to a high of 132.88 before closing higher by a whopping 1.51% (NY close of 132.84). Note the increase of 1.51% is the largest 1-day advance in almost 2 months. Despite the sharp rise, it is premature to expect a major reversal. That said, the current rebound could extend to 134.20. At this stage, a sustained rise above this level is unlikely. Overall, the current upside pressure will remain intact as long as USD stays above 131.20, the current ‘strong support’ level.”