After hitting 125.00, it looks like buyers are running out of steam as the pair is continuing its descend from the figure level this week to 121.90 at the moment.
There are several factors in play but I would argue it is perhaps a confluence of them that is leading to the exhaustion seen in USD/JPY this week:
- The 125.00 level is a key psychological target, acting as a natural resistance and profit-taking region
- Japanese officials have stepped in with some light verbal intervention
- Japan fiscal year-end repatriation flows
Going back to the charts, it has been a stunning surge higher in March trading for USD/JPY. A 1,000 pips move is nothing to scoff at and that is what we got during the month. As such, some late exhaustion here isn't anything out of the ordinary as well.
Looking to the above, buyers are still hanging on somewhat at around the 200-hour moving average (blue line) @ 121.29. That will be a key near-term level to watch before the week concludes. But for now, sellers are trying to seize back some control with a series of lower highs and lower lows forming, though I'd be more convinced on a break below the 200-hour moving average.
Beyond that, further key support is seen closer to 120.00.