USD/JPY has dropped in the Tokyo opening hour and is testing the 20 dma on the hourly time frame. The recent price action has been one of recovery after the Yen rallied to 110.98 vs the greenback on broad weakness in the US dollar and a flight to safety in the Yen keeping the bid theme alive. Markets art attacking the Yen outside of Japanese authorities intervening, but that may not be the case for much longer as the Japanese currency soars to unconformable levels for Japan and the authorities in the BoJ. In respect to thevalue of the greenback, "On the one hand, the US economy could reassess itself and the Fed may continue on a path of normalisation, leading to further USD gains. On the other hand, economic conditions may change sufficiently to alter meaningfully the path of normalisation, stopping it or even reversing it, leading to further depreciation and likely higher commodity prices as well," explained analysts at Nomura. USD/JPY levels Technically, USD/JPY is well and truly in bears territory and it will take a big turn around event or number of events to change the direction of the tides now that a top has been confirmed with scope to the 106.63/38.2% retracement of the move up from 2012 and the 105.40 2014 high, as noted by Karen Jones, chief analyst at Commerzbank. "We have a Fibonacci extension at 112.00 and this may hold the initial test. Rallies should now struggle 113.90/115.00." For more information, read our latest forex news.