FXStreet (Guatemala) - USD/JPY is currently trading at 120.67 with a high of 121.36 and a low of 120.33 and has broken down below the 100 and 200 DMA. USD/JPY has been offered of late on risk aversion flows and the Yen has gathered pace since the positive Tankan survey as far as large manufacturers were concerned and their capex data. That strength faded in European session, but resistance at 121.20 drew in supply again to make new aforementioned lows while price is stabilizing again at current spot, its movement highly dependent on the broader market tone with an elevated vulnerability to knee-jerk gains in the current environment as explained by Eric Theoret, CFA, CMT FX Strategist at Scotiabank. "Friday's BoJ meeting presents the primary domestic risk for JPY, though we highlight that policymakers have maintained confidence in their ability to reach their inflation target with the current degree of stimulus. As such, risk lies with a dovish surprise and the potential for some retracement of JPY's ~2% rally over the past week." Meanwhile, analyst at Deutsche Bank look ahead to the FOMC meeting and explained that there could be a tactical long opportunity on a drop in USD/JPY. USD/JPY levels Technically, Eric Theoret, CFA, CMT FX Strategist at Scotiabank again explained that the momentum indicators are accelerating, trend signals are providing confirmation, and the convergence of the longer-term MA's appears set provide for further decline. "A consideration of mid-late August decline in USD/JPY and key retracement levels (on a closing basis) underscores the importance of 121.00 given its proximity to the 38.2% Fibo. Support levels are limited above 120 and the late August closing low 118.41." For more information, read our latest forex news.