FXStreet (Mumbai) - USD/JPY’s recovery once again lost legs near 118 handle and the major witnessed sharp selling pressure thereon, now testing low near 117.50. USD/JPY remains capped below 118.00 Currently, the USD/JPY pair trades -0.38% at 117.58, hovering within a striking distance of the daily lows posted at 117.54 last minutes. The bears fought back control and capped the recovery in the dollar-yen pair, after the subdued performance on the European stocks so far, sparked fresh risk-aversion wave across the markets and curbed appetite for risk yet again. Moreover, a renewed buying interest around the yen following BOJ’s Governor Kuroda’s upbeat comment on the Japanese economy, also added to the bearish pressure in the USD/JPY pair. Kuroda noted that he sees the recent oil price declines to be positive for the Japanese economy. Further, the decline in the major can be also partly attributed to the falling US treasury yields. The 2-year yields on the T-notes drop -1.87% to 0.878% while that on the 10-year T-bills slide -1.35% to 2.068%. Amidst a lack of data for the pair until the US session, focus will remain on the oil price moves and the sentiment on the European equities. USD/JPY Technical levels to watch In terms of technicals, the immediate resistance is located at 118.12 (1h 200-SMA). A break above the last, the major could test 118.39/59 (Jan 13 High/ daily R1). While to the downside, the immediate support is located at 117.27/20 (Jan 14 & 12 Low) below which 117.00 (round number) would be tested. For more information, read our latest forex news.