Fundamental Outlook:
USD/JPY is expected to trade with bearish bias. It is undermined by negative dollar sentiment (ICE spot the dollar index last 97.82 versus 99.61 early Wednesday) after the Federal Reserve removed the word "patient" from its policy statement as widely anticipated. However it lowered US growth estimates and its forecasts for interest rates and inflation in the longer term. Fed Chairwoman Yellen said dropping "patient" from the statement "does not mean we are going to be impatient" deciding when to move, and also noted that the stronger dollar weakened US exports and pushed down inflation rate. Lower US Treasury yields also weigh on the USD/JPY pair (10-year at 1.918% versus 2.059% late Tuesday) as the Fed signaled a more cautious approach to raising interest rates than investors had expected and Japan exporter sales. But USD/JPY losses are tempered by the demand from Japan importers, ultraloose Bank of Japan's monetary policy, yen-funded carry trades as global risk sentiment improves (VIX fear gauge eased 10.79% to 13.97; S&P 500 rose closed up 1.22% at 2,099.5 overnight) after the dovish Fed's statement.

Technical comment:
The daily chart is tilting negative as stochastics is falling from overbought levels, the MACD is staging bearish crossover against its exponential moving average, bearish parabolic stop-and-reverse signal hit Wednesday.

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, long positions are recommended with the first target at 121.10 and the second target at 121.55. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 120.20. A break of this target would push the pair further downwards, and one may expect the second target at 119.95. The pivot point is at 120.35.

Resistance levels:
121.10
121.55
121.85

Support levels:
120.20
119.90
119.65