USD/JPY hits new session lows near 104.65, Nikkei extends losses

The USD/JPY pair failed once again to hold above 105 handle as the Japanese yen extended gains amid additional losses witnessed in the Japanese stocks, knocking-off the major to fresh session lows.

USD/JPY meets fresh supply above 105

The dollar-yen pair came under fresh selling pressure over the last hour after the yen picked-up considerable strength amid reports crossing the wires that Abe's over JPY 28 trln stimulus package is expected to include around JPY 7 trln in spending.

The latest leg lower in the USD/JPY pair can be also attributed to a renewed bout of risk-aversion that gripped the Asian markets, especially the Japanese equities. At the time of writing, USD/JPY drops -0.67% at fresh session lows of 104.63, while the Nikkei 225 index slumps -1.20% to near 16,450 levels.

Looking ahead, amid a data-quiet trading calendar today, focus remains on the US jobless claims data for fresh incentives ahead of key risk events from Japan due out on Friday, including the much-awaited BOJ verdict.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 105.39 (5-DMA). A break above the last, the major could test 105.79 (10-DMA). While to the downside, the immediate support is seen at 104.44 (20-DMA) and below that at 104 (round number).