USD/JPY: Still watching out for reciprocal tariffs – OCBC

USD/JPY continued to trade higher, in line with our near-term caution about the reciprocal tariff uncertainty. USD/JPY was last seen at 153.45 levels, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Rebound risks likely in the interim

"Bearish momentum on daily chart intact but shows signs of fading while RSI is turning higher from near oversold conditions. Rebound risks likely in the interim. Resistance at 155.20 levels (50 DMA). Support at 152.70/80 levels (100, 200 DMAs), 151.50 (38.2% fibo retracement of Sep low to Jan high), 150 levels." 

"As a recap, Trump mentioned that reciprocal tariff will be applied on all nations, and we believe Japan may not be spared. When it comes to automobile, Japanese cars are amongst the top 5 most popular in US and Korean cars are on the top 10 list. On agricultural products, Japan has a high tariff rate of 204.3% for rice and 23.3% for meat." 

"The risk is a direct tariff hit on Japanese goods and JPY may come under pressure in this scenario."