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    USD/JPY testing lows near 102.50 as risk conditions deteriorate Dhwani Mehta

    A renewed bout of risk-aversion gripped the markets after the oil prices fell back in the red, triggering fresh demand for the safe-haven yen against its US counterpart in the European session.USD/JPY drops below 5-DMA at 102.63The Japanese currency extends its bullish momentum versus the greenback in Europe, knocking-off USD/JPY below the mid-point of 102 handle. The demand for the yen regained momentum after the European indices pared gains, while the oil prices turned negative, spooking investors’ sentiments once again.Earlier on the day the Japanese yen strengthened across the board after the Japanese CPI and manufacturing figures better expectations. Japan May CPI came in at -0.4 % y/y versus -0.5% expected, while the BOJ Q2 Tankan Large Manufacturing Index: came in stronger at 6 versus 4 expected.Next of relevance for the major remains the US ISM manufacturing PMI report due later in the NA session. In the meantime, the broader markets sentiment will play a key role behind USD/JPY price-action.USD/JPY Technical levels to watchIn terms of technicals , the immediate resistance is located at 103.33/39 (10-DMA/ Jun 30 high). A break above the last, the major could test 104 (round number). While to the downside, the immediate support is seen at 102 (round number) and below that at 101.52 (Jun 28 low).

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