FXStreet (Mumbai) - The US dollar keeps falling versus its Japanese counterpart as we progress towards the US open, with USD/JPY now retesting daily lows near 120.40 region. USD/JPY drops below hourly 200-SMA at 120.50 Currently, the USD/JPY pair drops -0.63% to 120.37, within a shouting distance of the daily lows struck at 120.29 in last hours. The USD/JPY pair accelerated the downslide below a break of hourly 200-SMA and now hovers around daily lows on the back of rising yen as falling European stocks soured sentiment. Also, the Japanese currency keeps the upbeat momentum intact backed by the on-hold policy stance announced by the BOJ earlier on the day. Moreover, markets turned away from the US currency ahead of US economic data, including the Fed’s favourite inflation gauge, lined up for release ahead of US open. While personal spending, Chicago PMI, UoM consumer sentiment and employment cost index will be also published. The core PCE inflation rate is expected to decline, slipping to 1.4% from the previous 1.9%. USD/JPY Technical levels to watch The prices fall further below 121 barrier, with the immediate support in sight located at 120.23/21 (Oct 28 & 23 Low), below which 120 (round number) would be tested. While the USD/JPY recovery would face stiff resistance at 121 handle, above which the pair could test 121.50 (Today’s High + 200-DMA confluence) and from there to 121.62/73 (100-DMA + Aug 28 High). For more information, read our latest forex news.