USD/JPY dropped to as low as 106.57 as corrective pattern from 111.71 extended with a third leg. As a temporary low was formed, initial bias is neutral this week first. Further decline is mildly in favor and break of 106.57 will target 105.98 support and below. But downside should be contained by 61.8% retracement of 101.18 to 111.71 at 105.20 to bring rebound. On the upside, break of 108.24 will turn bias back to the upside for 109.85 resistance.
In the bigger picture, USD/JPY is still staying in long term falling channel that started back in 118.65 (Dec2016). Hence, there is no clear indication of trend reversal yet. Break of 105.98 support could extend the down trend through 101.18 low. However, sustained break of 112.22 should confirm completion of the down trend and turn outlook bullish for 118.65 and above.
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 move 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.