FXStreet (Mumbai) - A knee-jerk rally in the USD/JPY pair lost steam near the mid-point of 121 handle, and from there the major reversed more than half BOJ-inspired rally, before climbing back higher to 120.20 last. USD/JPY volatile within 300-pips range The BOJ eased its monetary policy further this Friday and surprised markets by cutting interest rate to -0.1% as the central bank saw greater downside risks to the growth and inflation outlook in wake of the recent global financial markets turmoil. Therefore, the Japanese currency came under heavy selling pressure against the American dollar and eroded almost 300 pips in a knee-jerk reaction the BOJ policy announcement, with the USD/JPY pair rallying as high as 121.40. However, the major reversed partial gains, although remains strongly bid as the latest BOJ move underscores the divergent monetary policy outlooks between the Fed and BOJ. Meanwhile, the BOJ Governor Kuroda’s speech at the press conference will be closely heard, especially in light of the latest policy changes. USD/JPY Technical levels to watch In terms of technicals, the immediate resistance is located at 121.48/50 (200-DMA/ round number). A break above the last, the major could test 122.22 (Dec 11 High). While to the downside, the immediate support is located at 119.83 (50-DMA) below which 118.53 (Daily low) would be tested. For more information, read our latest forex news.