Fundamental overview:
USD/JPY is expected to trade downside. It is undermined by the flows to haven JPY and unwinding JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 4.24% to 22.39, S&P 500 closed 0.92% lower at 1,992.67 overnight) as a shock decision by the Swiss National Bank to abandon the Swiss franc's ceiling against the euro that was in place for more than three years roiled global markets. USD/JPY is also weighed by the lower U.S. Treasury yields (10-year at 1.725% versus 1.835% late Wednesday), and Japan's exporter sales. But USD/JPY losses are tempered by the demand from Japan's importers and Bank of Japan's large-scale monetary easing policy and positions adjustment ahead of U.S. long weekend (financial markets in U.S. are shut for a public holiday on Monday). U.S. data were mixed on Thursday as less-than-expected 0.3% on-month fall in U.S. December PPI (versus forecast -0.4%) and stronger-than-expected rise in New York Fed Empire State manufacturing index to 9.95 in January from -1.23 in December (versus forecast 4.5) were offset by more-than-expected 316,000 U.S. jobless claims in week ended Jan. 10 (versus forecast 295,000) and bigger-than-expected drop in Philadelphia Fed business index to 6.3 in January from 24.3 in December (versus forecast 20.0).

Technical comment:
Daily chart is negative-biased as MACD and stochastics are bearish, although the latter is at oversold levels, five and 15-day moving averages are declining.

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 the pivot point. Short positions are recommended with the first target at 116. A break of this target will move the pair further downward to 115.50. The pivot point stands at 117.55. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to this scenario, a long position is recommended with the first target at 117.95 and the second target at 118.50.

Resistance levels:
117.95
118.50
119

Support levels:
116
115.50
115