Given the overall strength in the Asian region, Dolan believes the dollar/yen is close to a top in the 110.00 area as of mid-June. Ultimately, he looks for dollar/yen to retreat and consolidate in the 104.00/105.00 zone in the fall months. However, as signs emerge of additional strength in the Japanese and Asian region overall, he expects a move toward the 100/98.00 region by year-end.

Dolan’s advice: “Look for the opportunity to buy yen on the crosses (non-dollar cross rates), and buy yen on dollar strength into the 109.00/111.00 area,” he says. “Be prepared right now for some consolidation around 104.00/105.00. But traders need to keep an eye on the downside. When the 104.00/104.20 area is broken, it will unleash a flood of yen buying.”

Sinche calls risk/reward levels attractive for the short side at current levels, around 109.00 in mid June. “We are near the upper end of the dollar/yen range,” he says.

While China continues to be a wild card, some analysts now expect flexibility in its currency (which is currently pegged to the U.S. dollar) as early as this summer, which ultimately should support the yen.

Sinche sees potential for the dollar/ yen to retreat back below 105.00 in the near term and overall hover in a 103.00/109.00 range in the second half.

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