USD/JPY turns neutral at 102.45

After an initial dip below 102.00 handle, the USD/JPY pair has managed to recover all of its lost ground and has now turned flat to currently trade around 102.45 region.

The Japanese Yen continues to benefit from safe-haven flow amid prevalent risk-off sentiment as depicted by downbeat equity markets. 

Ahead of BOJ monetary policy meeting on September 20-21, reports that the central bank might consider lowering interest rates further into negative territory drove the pair higher on Wednesday. However, lack of clarity over the timing of next Fed rate-hike action triggered a sharp reversal and the pair dropped around 140-pips from Wednesday's swing high. 

Traders now seem to reposition themselves ahead of a slew of economic releases from the US, which might provide some clues over the next Fed monetary policy decision at its upcoming meeting next week. The pair might also derive move from BOE monetary policy decision infused volatility in the FX market. 

Technical levels to watch

Should the pair manage to extend the ongoing recovery beyond 50-day SMA immediate resistance near 102.70, it is likely to aim back towards reclaiming 103.00 handle and head towards testing Wednesday's high resistance near 103.35 area. On the flip side, sustained weakness below 102.00 handle, and a subsequent drop below 101.85-80 support, is likely to trigger a fresh leg of weakness immediately towards 101.40-35 support area ahead of 101.00 round figure mark.