USD/JPY tumbles to fresh multi-week lows, awaits Fed

The USD/JPY pair erased all of its BOJ-led gains to 102.78, retracing over 180-pips from session high and dipped below 101.00 handle before retracing few pips to currently trade around 101.10 region.

In the post-BOJ price action, the major lost its upside momentum and reversed sharply from above 50-day SMA region amid skepticism over the effectiveness of the central bank's new policy framework. The policy statement revealed that the central bank would now target to keep 10-year interest rates near zero, aimed at steering-up inflation.

The central bank also disappointed by not cutting interest rates farther into negative territory, forcing investors to unwind their bearish Yen positions and exerting further selling pressure around the major. 

Investors now turn their attention to the outcome of the Federal Reserve's two-day monetary policy meeting, where strong hints of an eventual Fed rate-hike action in 2016 might provide a much needed respite for US Dollar bulls.

Technical levels to watch

A follow through selling pressure below 101.00 handle is likely to accelerate the slide immediately towards 100.55-50 intermediate support before the pair eventually drops to 100.00 psychological mark.

Conversely, any recovery attempts might now confront resistance near 101.65 level above which the momentum could get extended beyond 102.00 handle towards 102.50-60 strong resistance area marking 50-day SMA.