Fundamental Outlook:
USD/JPY is expected to trade with bearish bias. It is undermined by negative dollar sentiment (ICE spot dollar index last 98.12 versus 98.40 early Wednesday) on fewer-than-expected 189,000 increase in ADP March US private sector jobs (versus forecast +225,000), worse-than-expected drop in the US ISM manufacturing PMI to 51.5 in March from 52.9 in February (versus forecast 52.5). USD/JPY is also weighed by lower US Treasury yields (10-year at 1.859% versus 1.934% late Tuesday), Japan exporter sales, and selling of the yen crosses amid decreased investor risk appetite (S&P 500 closed 0.40% lower at 2,059.4 overnight) on the weak ADP US March private sector jobs growth, ISM manufacturing activity data, and caution ahead of Friday's critical US March non-farm payrolls report. But USD/JPY losses are tempered by the demand from Japan importers and ultra-loose Bank of Japan's monetary policy.

Technical comment:
Daily chart is mixed as The MACD is bearish but stochastics is neutral.

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 119.25. A break of that target will move the pair further downwards to 118.85. The pivot point stands at 120. 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 that scenario, a long position is recommended with the first target at 120.30 and the second target at 120.55.

Resistance levels:
120.30
120.55
120.85

Support levels:
119.25
118.85
118.30