Fundamental overview:

USD/JPY is expected to consolidate with risks skewed lower. It is undermined by the softer USD sentiment (ICE spot dollar index last 86.95 versus 87.29 early Tuesday) after wider-than-expected U.S. September trade deficit of $43.03 billion (versus forecast $40.6 billion deficit), sharp drop in U.S. ISM-NY current-business index to 54.8 in October from 63.7 in September; lower U.S. Treasury yields (10-year at 2.335% versus% 2.346% late Monday), diminished investor risk appetite (VIX fear gauge rose 1.09% to 14.89, S&P 500 closed 0.28% lower at 2,012.1 overnight) as caution prevails ahead of U.S. nonfarm payrolls report Friday, the European Commission cut its GDP growth forecasts for the eurozone, and oil prices hit three-year lows--extending losses from Monday after Saudi Arabia announced it would cut its selling price for crude to the U.S.--reinforcing expectations that inflation will remain subdued. USD/JPY is also weighed by Japan exporter sales. But USD sentiment is soothed by the rise in U.S. IBD/TIPP Economic Optimism Index to 46.4 in November from 45.2 in October. USD/JPY losses are also tempered by the demand from Japan importers and weak yen sentiment after the Bank of Japan's unexpected announcement of fresh stimulus on Friday.

Technical comment:
Daily chart is mixed as MACD is bullish, 5 and 15-day moving averages are advancing but stochastics is turned bearish at overbought zone, inside-day-range pattern was completed on Tuesday.

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, a long position is recommended with the first target at 114.70 and the second target at 115.70. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 112.30. A break of this target would push the pair further downwards and one may expect the second target at 111.45. The pivot point is at 112.85.

Resistance levels:
114.70
115.70
116

Support levels:
112.30
111.45
111