Fundamental Overview:

USD/JPY is expected to consolidate as markets await 1800 GMT Federal Reserve's interest rate decision. Market participants are watching out for subtle adjustments in the way the Fed describes its outlook on policy that could signal earlier hikes to the Fed's key policy rate than the widely-expected mid-2015. USD/JPY is underpinned by yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge eased 9.84% to 12.73; S&P 500 rose 0.75% to close at 1,998.98 overnight) after a report by Goldman Sachs economists and comments by Wall Street Journal chief economics correspondent Jon Hilsenrath both suggest the Fed may continue to use the words "considerable time" to describe when it may raise rates after the bond-buying program is over in October, Chinese media report that the People's Bank of China had stepped up its efforts to stimulate the economy by providing some $81 billion of liquidity to the country's five biggest banks. USD/JPY is also supported by the demand from Japan importers. But USD/JPY gains are tempered by the Japan exporter sales and broadly weaker USD undertone (ICE spot dollar index last 84.09 versus 84.25 early Tuesday and jitters about the Scottish independence vote on Thursday. 

Technical comment: 
Daily chart is still positive-biased as MACD is bullish, stochastics stays elevated at overbought zone, 5 and 15-day moving averages advancing.   

Trading recommendations: 
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 106.85. A break of this target will move the pair further downwards to 106.60. The pivot point stands at 107.60. In case the price moves in the opposite direction and bounces back from the support level, then it will moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 107.80 and the second target at 108.10. 

Resistance levels:     
107.80
108.10
108.35

Support levels: 
106.85
106.60 
106.20