Overview:
USD/JPY is consolidating with bullish bias after hitting six-day high of 78.86 on Monday. The rate is underpinned by reduced safe-haven appeal of yen and yen-funded carry trades as global risk sentiment improves (VIX fear gauge eased 5.39% to 15.27), Wall Street gained overnight (S&P up 0.81%) on stronger-than-expected 1.1% rise in U.S. September retail sales (vs. +0.7% forecast), Citigroup's latest earnings topping expectations, and weak Chinese inflation data fanning expectations of more monetary stimulus measures from Beijing. But risk sentiment dented by weaker-than-expected rise in New York Fed's Empire State's business conditions index to minus 6.16 in October from minus 10.41 in September (vs. minus 4.0 forecast). There is increasing anxiety about Spain's reluctance to request financial aid and prospect that Greece might not get another round of financial aid. The USD/JPY pair is also supported by demand from Japan importers and investment trusts. But USD/JPY gains tempered by Japan exporter sales and concerns about U.S. "fiscal cliff" that could throw the U.S. economy back into recession.
Preference:
As Technical indicators shows the further upside of USD/JPY, preference should be LONG positions at 78.65 with 79 and 79.20 in sight as targets.
Resistance Levels:
79 *** intraday Resistance 
79.23 (Sept. 19 high)
79.37 (200-day moving average)   
Alternative scenario:
In case the market moves in opposite direction, the downside penetration of 78.6 will call for 78.45 and 78.25.
Support Levels:
78.45 *** intraday support 
78.28 (Friday's low)
77.94 (Thursday's low)   
Comment:
The pair has rebounded on its support and should post further advance. USD/JPY daily chart is positive-biased as MACD and stochastics are bullish.