FXStreet (Mumbai) - The USD/JPY sell-off extends towards the mid-Asian session, with the JPY bulls storming their way through the critical 118 barrier on the back of the ongoing rout in the Chinese equities. USD/JPY eyes Aug lows Currently, the USD/JPY pair trades -0.45% lower at 117.94, recovering from a sharp drop to fresh five-month lows struck at 117.38 last minutes. The slump in China’s stock markets on the back of Yuan mid-point depreciation once again has exacerbated the pain in the USD/JPY pair as risk-off persists at full steam in Asia. So far this session, the Chinese stocks have fallen more than 7% and triggered circuit breaker, which means trading halted for rest of the day. The panic in the markets was sparked by yuan devaluation today and also around the chatter of PBOC intervention in a bid to stabilize the rising USD/CNH. The central bank sets the USD/CNY mid-point at 6.5646 versus yesterday's fix of 6.5314 and close at 6.555. Meanwhile, the major is expected to closely monitor the development around China, with markets having moved past the FOMC minutes. On the data front, the weekly jobless claims from the US will be eyed in a data-quiet US calendar for today. USD/JPY Technical levels to watch In terms of technicals, the immediate resistance is located at 118.50 (confluence of hourly 5, 10, 20 MAs). A break above the last, the major could test 118.75 (daily high). While to the downside, the immediate support is located at 117.72/68 (daily S2 & low) below which 117.22 (daily S3/ Aug levels) would be tested. For more information, read our latest forex news.