USD/JPY weaker at 102.25 amid cautious trade

Having faced a rejection at session high level of 102.83, the USD/JPY pair dropped to 102.00 handle before retracing few pips to currently trade at 102.20-30 band.

Risk aversion seems to have gripped equity markets, with Japan's Nikkei 225 closing with a loss of nearly 1.5%, and is boosting the safe-haven appeal of the Japanese currency. 

The pair remained in focus on news of an emergency meeting between the Japanese finance minister Aso and BOJ Governor Kuroda. Moreover, market participants also seemed to have turned cautious ahead of the possible announcement of a 28 trillion Yen Japanese government stimulus package on Tuesday. 

Investors will continue to focus on developments / news surrounding the anticipated stimulus package and look forward to an expected new conference by Aso and Kuroda. 

Adding to this, a fresh bout of selling pressure around the greenback also seems to constitute towards the pair's downtick in the last couple of hours. 

From the US, investors will confront the release of US Core PCE Price Index, which is considered to be the Federal Reserve's preferred inflation gauge and could provide further momentum for the USD/JPY major. 

Technical levels to watch

On the immediate downside, 102.00 round figure mark remains immediate support to defend, which if broken would continue to exert additional selling pressure that could drag the pair further towards its next major support near 100.60-50 region.

Meanwhile on the upside, recovery momentum above 102.65-70 region seems to boost the pair immediately towards 103.20-25 horizontal resistance, above which the pair seems all set to extend its upward trajectory towards 103.90-104.00 resistance area.