FXStreet (Edinburgh) - After a brief test of daily highs in the area of 123.40, USD/JPY has lost part of the initial vigour and is now returning to the 123.25/20 band. USD/JPY dominated by USD-dynamics The Japanese docket offers nothing in terms of potential market movers for the next sessions, leaving all the attention to the USD and the ongoing speculations on a rate hike by the Federal Reserve in December. Currently, probabilities of a Fed’s lift-off next month remain around 70% following the recent Payrolls numbers. In the meantime, spot manages to keep the trade above the 123.00 handle, or 3-month tops, bolstered by a pick up in US Treasuries and a wider divergence in monetary policy between the Fed and the BoJ. USD/JPY levels to consider At the moment the pair is advancing 0.13% at 123.29 with the next hurdle at 124.58 (high Jul.30) ahead of 125.29 (high Aug.12) and finally 125.86 (2015 high Jun.5). On the other hand, a breach of 121.76 (100-day sma) would aim for 120.87 (50% Fibo of 125.28-116.46) and then 120.49 (55-day sma). For more information, read our latest forex news.