Fundamental Overview:

USD/JPY is expected to trade in a higher range. It is underpinned by the broad USD strength amid escalation of risk aversion as the U.S. stepped up its involvement in Syria in the fight against Islamic State militants. USD sentiment is also boosted by the Markit flash U.S. September manufacturing PMI coming in at 57.9, unchanged versus August's reading and keeping the index at a 52-month high and rise in U.S. Richmond Fed manufacturing index to 14 in September from 12 in August. USD/JPY is also supported by the ultra-loose Bank of Japan's monetary policy and demand from Japan importers. But USD/JPY gains are tempered by the Japan exporter sales, lower U.S. Treasury yields (10-year at 2.527% versus 2.567% late Monday), selling of yen crosses amid decreased risk appetite (VIX fear gauge rose 9.06% to 14.93, S&P 500 fell 0.58% overnight) as investors' concern mount over global economic growth after a gauge of activity in the eurozone's manufacturing and services sectors for September fell to its lowest level for the year.

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

Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 109.10 and the second target at 109.45. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 108.15. A break of this target would push the pair further downwards and one may expect the second target at 107.65. The pivot point is at 108.45.

Resistance levels:
109.10
109.45
110

Support levels:
108.15
107.65
107.10