USD/JPY gyrated lower to 103.31 last week but recovered strongly since then. Initial bias stays neutral this week first. Overall, USD/JPY is still staying inside the falling channel that started at 111.71. Hence, deeper decline could be seen. Below 103.31 will bring retest of 102.58 low first. however, on the upside, break of 104.39 and sustained trading above the channel resistance will argue that the down trend from 111.71 has finally completed. Stronger rise would be seen to 105.67 resistance for confirmation.
In the bigger picture, USD/JPY is still staying in long term falling channel that started back in 118.65 (Dec. 2016). Hence, there is no clear indication of trend reversal yet. The down trend could still extend through 101.18 low. On the upside, break of 105.67 resistance is needed to be the first signal of medium term reversal. Otherwise, outlook will remain bearish.
In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 (2015 high) is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective pattern which could still extend. In case of deeper fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77. Up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.