Nikkei hits lowest level since Aug. 21, trades well below 200-day EMA

• Japan's Nikkei index hit two-month lows Tuesday.
• The index is currently trading well below the 200-day exponential moving average (EMA) of 22,368.

Currently, Japan's Nikkei index is trading at 22,108 - down 2.24 percent on the day - having clocked a two-month low of 22,085 earlier today.

The risk aversion in the global markets and the resulting rise in the anti-risk JPY has dealt a double blow to Japanese stocks.

Technically speaking, the index could suffer a deeper drop in the coming days if the bears manage to keep prices below the 200-day EMA support of 22,368 breached earlier today.

It is worth noting that in the recent past, the dips to or below the 200-day EMA have been short-lived. Hence, a sustained break below that level could prove costly.