FXStreet (Guatemala) - USD/JPY is starting out the year threatening the downside with the potential of a break of the 120 handle. Risks stay with the uncertainty in the markets. At the same time, we will be looking to see whether the Fed has any further ammunition to add in Q1. For this week, the FOMC minutes might remind us that there is still slack in the markets and that further hikes will be incremental and gradual allowing for further downside in the major. The Nonfarm Payrolls is at the end of the week as the main attraction. But caution should go into a short in the major, as warned by analysts at Brown Brothers Harriman. "The fundamentals offer an important caveat against getting too bullish on the yen. The Japanese economy continues to struggle, despite the hyper-aggressive monetary policy and a budget deficit of 6.5% of GDP. Reports that the BOJ will lower its FY2016 CPI forecast, after announcing operational adjustments a few weeks ago, can only fan expectations of further QQE in the year ahead." USD/JPY treading thin ice Technically, as recently noted by Karen Jones, chief analyst at Commerzbank, USD/JPY has seen an emphatic rejection of resistance offered by the 123.77 recent high. "The support line at 120.38 guards key support, which remains the 119.11 2012-2015 uptrend, which we look to hold. Above 123.77 will target 125.00/28 (the August high)." For more information, read our latest forex news.