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USD/JPY: Heavy around 120.50, risk-off persists ahead of Fed

FXStreet (Mumbai) - The US dollar remains under heavy selling pressure versus the Japanese yen for the second straight session on Tuesday, knocking-off USD/JPY to session lows near the hourly 100-SMA.

USD/JPY rejected at 121 handle

Currently, the USD/JPY pair drops -0.44% to 120.56, retreating slightly from fresh session lows struck at 120.48 last minutes. The major is relentlessly offered mainly driven by increased safe-haven bids for the yen, as risk-off sentiment seeps back in Asia amid nervousness ahead of the Fed 2-day policy meeting commencing later today.

Among major Asian indices, the Nikkei drops -0.67, Australia’s S&P/ASX is losing -0.10% while the Chinese benchmark index, the Shanghai Composite sinks -2.40%.

Moreover, rising demand for the yen on the back of month-end exports’ sales, as noted by a Reuters editor, also partly contributed to the steep losses seen in the USD/JPY pair.

Meanwhile, the major will be influenced by a host of crucial macro data from the US due alter today. Although the main focus remains on the key FOMC decision and the BOJ monetary policy statement due later this week.

USD/JPY Technical levels to consider

The pair failed near 121 handle and dropped sharply, with the immediate support now in sight might be located at 120.32 (10-DMA), below which 120.11/09 (50 & 20-DMA) would be tested. A failure to breach the 10-DMA, the prices could rebound towards 121 barrier, above which the pair would climb further towards 121.43 (200-DMA) and from there to 121.67/73 (100-DMA + Aug 28 High).

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