FXStreet (Mumbai) - USD/JPY’s recovery fizzled once again near 118.20 region and the major dropped sharply to fresh five-month lows, tracking steep losses in the European equities. USD/JPY back below 118.00, eyes Aug lows Currently, the USD/JPY pair trades -0.81% lower at fresh five-month lows of 117.51, notwithstanding the 118 barrier. The major resumes its carnage and falls like a knife as the European stocks dive deeper in the red led by China stocks sell-off, while oil prices remain at multi-year lows. The German DAX sinks -3.65% versus -2.18% seen at open, while the UK’s FTSE drops -2.82% versus -1.70% previous. The acceleration of losses in the European equities refuels renewed wave of risk-aversion into markets, raising the demand for the safe-haven in the yen. Moreover, the US dollar also shaved-off gains and fell back into the negative territory, which further weighed heavily on the USD/JPY pair. Looking ahead, the major will remain under pressure on the back of persisting risk-off sentiment and hence, the upcoming US jobless data may virtually have no impact on the prices. 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 117.22 (daily S3/ Aug levels) below which 116.50 (psychological levels) would be tested. For more information, read our latest forex news.