FxWirePro: USD/JPY trades below 103 handle, greenback on the defensive on dovish Fed expectations

USD/JPY chart - Trading View 

USD/JPY  trades on the defensive on the first trading day of the new year, slips below 103 handle.

The greenback remains offered on expectations that the Federal Reserve would keep rates low for a prolonged period.

Meanwhile, the cases continue to rise in the US and across Europe. Japan Prime Minister Yoshihide Suga is considering a new state of emergency declaration amid a surge in COVID-19 cases. 

Furthermore, upbeat prints by Japan’s Jibun Bank Manufacturing PMI for December also favored USD/JPY sellers. 

The second reading of Japan's manufacturing gauge beat forecasts of 49.7 to print at 50.00, first expansionary figure in nearly two years.

Technical analysis supports downside for the pair. 103 is proving strong support area, the major is struggling to close below from a past few sessions.

Close below 103 will open downside. Scope for test of 102.60 (trendline support) ahead of 101.85 (Trendline support).