The pair is down 0.7% to 129.80 with the low earlier touching 129.50 as we get to the tail end of Asia trading. The more important thing to note about USD/JPY today is the attempted break under 130.00. If sellers can keep a daily close below the key psychological level, that will spell out a further downside leg for the pair to start the new year.
The May low will be the next target on any downside push, standing around 126.36 but it will be more likely to see a run towards 125.00 and then potentially 120.00 in the bigger picture.
All of this comes as we see the yen gather bids on increasing odds that the BOJ is likely to move towards a policy pivot as inflation pressures mount in Japan.
As for the dollar itself, it is trading rather mixed today as other major currencies aren't showing too much poise as we kick start 2023 trading.