USD/JPY's fall from 79.52 accelerated to as low as 77.04 and the decline is admittedly deeper than expected. The development dampened the view that fall from 79.52 is merely correction but then, it's not clearly impulsive so far and outlook is a bit mixed. But in any case, bias will remain on the downside as long as 77.87 minor resistance holds. Sustained trading below 61.8% retracement of 75.56 to 79.52 at 77.07 should pave the way for a retest on 75.56 low. Nevertheless, break of 77.87 will indicate that the choppy fall from 79.52 is finished and should turn bias back to the upside for retesting this resistance.
In the bigger picture, while the rebound from 75.56 was strong, USD/JPY is still staying inside the falling channel that started back in 2007 at 124.13. There is still no clear indication of long term trend reversal even though medium term downside momentum is diminishing with bullish convergence condition in weekly MACD. We'd still favor further downside in medium term as long as 85.51 resistance holds and USD/JPY could spiral down further to 70 psychological level.
In the long term picture, the long term down trend in USD/JPY is still in progress. Such down trend is expected to extend further into uncharted territory with 70 psychological level as next target. In any case, we'd at least need to see sustained break of 85.51 before considering trend reversal.