FXStreet (Guatemala) - USD/JPY was seeing some early price action ahead of Tokyo and the price dips below the 121 handle and starts to consolidate on the 120.80 supporting level in the positive Asian open tracking Wall Street on hawkish FOMC. However, the Japanese economy is experiencing slowing inflation and the effects of softening EM's while we await to hear the BoJ's semi-annual Outlook for Economic Activity and Prices this Friday where they might lower their inflation expectations. BOJ: Why further QQE tomorrow should not be ruled out? The BoJ are already buying $660b worth of government bonds annually, and there are some expectations and hints through long-term JGB's yields slipping through the 0.3% threshold that the Central Bank is about to embark on further and long-term monetary easing. This coupled with today's hawkish FOMC might be the catalyst for a break to the upside. Full text October FOMC statement USD/JPY levels Technically, we are trading around the 200 DMA at 121.01 while next key resistance is at 121.76 and late August 2015 high. 122.04 comes next being the December 2014 high, March 2015 high and the 61.8% retracement. Should there a breakout to 123.33, the 78.6% retracement, the August highs on the 125 handle could be a touch area of further resistance. For more information, read our latest forex news.