USD/JPY Intraday outlook

• Minor correction is expected in JPY below 121.68 marks.
   
• In long run USD/JPY remains mildly on the upside for 123.74 resistance levels.
   
• On the down side support levels are seen around 120.43, 119.18 and 1127.27 levels.
   
• Today Japan released Final manufacturing PMI data with flat numbers at 52.3 vs 52.4 previous release.
   
• Initial resistance levels are seen at 122.34, 123.74 and 125.52 levels.
   
• Today Japanese stocks opened the week higher as the post BoJ rally extends.
   
• Moreover the official China PMI manufacturing dropped to 49.4 in January versus expectation of 49.6. That's the lowest reading since August 2012 and the sixth straight month on contraction, the longest losing streak on record. The official non-manufacturing PMI also dropped to 53.5. The Caixin PMI manufacturing, on the other hand, rose slightly to 48.4, above expectation of 48.1.

We prefer to take short position in USD/JPY around 121.40, stop loss 121.68 and target 120.43 levels.