Fundamental Outlook:
USD/JPY is expected to consolidate after hitting a seven-day high of 120.37 on Tuesday. It is underpinned by the broadly firmer dollar undertone (ICE spot dollar index last 98.43 versus 97.94 early Tuesday) on the back of Fed's Lacker's comment that there is a "strong case" for the US central bank to begin raising short-term interest rates at its policy meeting in July and stronger-than-expected US Conference Board March consumer confidence index of 101.3 (versus forecast 96.8). USD/JPY is also supported by the demand from Japan importers and ultra-loose Bank of Japan's monetary policy. But USD sentiment are dented by the weaker-than-expected US March ISM-Chicago PMI of 46.3 (versus forecast 51.0); smaller-than-expected 4.6% on-year rise in US January S&P / Case-Shiller 20-city home price index (versus forecast +4.8%). Upside, USD/JPY is also limited by the Japan exporter sales, lower US Treasury yields (10-year at 1.926% versus 1.961% late Monday), and unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 5.38% to 15.29, S&P 500 closed 0.88% lower at 2,067.89 overnight) as caution prevails ahead of Friday's critical US March non-farm payrolls report, while concerns about Greece persist and oil prices fall.

Technical comment:
The daily chart is mixed as the MACD is bearish, a five-day moving average is below a 15-day moving average and is declining. Stochastics is turned bullish at oversold levels.

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 holds above its pivot point, a long position is recommended with the first target at 120.30 and the second target at 120.55. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 119.25. A break of this target would push the pair further downwards, and one may expect the second target at 118.85. The pivot point is at 119.60.

Resistance levels:
120.30
120.55
120.85

Support levels:
119.25
118.85
118.30