FXStreet (Mumbai) - The USD/JPY pair wipes-out gains and turns negative as we progress towards the mid-Asian trades, having faced rejection just shy of 118 handle. USD/JPY recedes on profit-taking The USD/JPY pair trades modestly flat at 117.72, recovering from a brief dip to 117.55 levels. The major failed to take the yield advantage amid persisting risk-on market profit, as the bears took over after the prices failed to clinch the key 118 barrier, now finding support above the hourly 200-SMA at 117.50. However, the risk-on rally in the Asian equities and a broadly higher US dollar keeps the downside restricted, while a stable yuan fix as well as minor gains in the oil prices also underpins. The Nikkei is rallying +3.34%, while ASX 200 jumps over 1%, while the Shanghai Composite is up 0.82%. The retreat seen in the major is more a corrective slide after a solid 200-pips recovery staged by the bulls from the yearly lows near 116 levels. Meanwhile, markets continue to track the developments surrounding oil and stock markets ahead of the US manufacturing PMI and existing home sales data. USD/JPY Technical levels to watch In terms of technicals, the immediate resistance is located at 118/118.03 (round number/ Jan 11 High). A break above the last, the major could test 118.28 (Jan 14 & 15 High). While to the downside, the immediate support is located at 117.49/47 (1h 200-SMA/ daily low) below which 117 (psychological levels) would be tested. For more information, read our latest forex news.