FXStreet (Mumbai) - USD/JPY keeps its recovery mode intact from a downward spike to 116.70 in opening trades, now consolidating below 5-DMA placed at 117.41. USD/JPY gains capped by falling Japanese stocks Currently, the USD/JPY pair trades 0.18% at 117.25, unable to extend beyond 117.35/40 region. The major is making recovery attempts towards mid-Asia, although lacks follow-through as mixed trading on the equities fails to lift overall sentiment, dented earlier by the free-fall in oil prices. USD/JPY kicked-off this week on the bids, however, the upside remained short-lived and the prices fell to 116.72 lows, as the news of Western sanctions lifted on Iran sparked a fresh sell-off in oil that spooked markets once again, with traders flocking to the safe-haven, Yen. However, the losses were quickly reversed and the major embarked upon the recovery back onto 117 handle after the latest measures by China, announced over the weekend, to stabilize offshore yuan markets boosted risk-sentiment somewhat. Meanwhile, the Chinese markets are in the green, with the Shanghai Composite up +0.36%, while Japan’s Nikkei drops -1.74% and Australia’s S&P/ASX 200 loses -0.87%. In the day ahead, light trading is expected as the US markets will be closed on a national holiday, while the focus now shifts towards China’s GDP and the inflation figures from the US due later this week for further momentum on the pair. USD/JPY Technical levels to watch In terms of technicals, the immediate resistance is located at 117.47/56 (10-DMA/ 1h 50-SMA). A break above the last, the major could test 117.71/88 (1h 100 & 200-SMA). While to the downside, the immediate support is located at 116.81/72 (daily S1 & low) below which 116.51 (Jan 15 Low) would be tested. For more information, read our latest forex news.