USD/JPY requires a sustained break above 121.50 to see gains towards 122.38. JPY is soft, weakening on the back of an improvement in the broader market tone resulting from the turn in China’s equity markets. JPY remains vulnerable to headline risk with domestic developments relatively limited ahead of next week’s BOJ. USDJPY short-term technicals: bearish—however there are early signs of a turn as we consider the bounce back above the 100 day MA 121.07. We see limited potential for resistance ahead of the 9 day MA (122.38) and look for gains in the event of a sustained break above 121.50.