Fundamental outlook:

USD/JPY is expected to trade in a lower range. The spotlight is on 12.30 GMT US April retail sales (forecast +0.2% on-month). USD/JPY is undermined by the broadly weaker dollar undertone (ICE spot dollar index last 94.56 versus 95.08 early Tuesday) amid lower US Treasury yields (10-year at 2.247% versus 2.272% late Monday), higher oil prices (Nymex crude settled up $1.50 at $60.75/bbl Tuesday), and fewer-than-expected 4.99 million US March jobs (versus forecast 5.1 million). USD/JPY is also weighed by the Japan exporter sales, decreased investor risk appetite as S&P 500 closed 0.29% lower at 2,099.12 overnight following a sharp selloff in European equities and government bonds. But USD sentiment is soothed by the larger-than-expected rise in US NFIB Index of Small Business Optimism to 96.9 in April from 95.2 in March (versus forecast 96.1), Fed's John Williams saying Tuesday he'd like the central bank to raise interest rates "a bit earlier" and repeating his view that a rise in rates is "on the table" at all Fed meetings now. He noted that the Fed will get two more months' worth of economic data before meeting in June, which will "paint a more complete" picture of the economy than currently exists. USD/JPY losses are also tempered by demand from Japan importers and ultra-loose Bank of Japan's monetary policy.

Technical comment:
The daily chart is mixed as the MACD and stochastics are in bullish mode, but five-day moving average is meandering sideways.

Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 119.40. A break of that target will move the pair further downwards to 119. The pivot point stands at 120.30. 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, long positions are recommended with the first target at 120.50 and the second target at 120.75.

Resistance levels:
120.50
120.75
121

Support levels:
119.40
119
118.75