Fundamental Outlook:
USD/JPY is expected to consolidate in a higher range. It is underpinned by the improved dollar sentiment (ICE spot dollar index last 99.02 versus 97.82 early Thursday) as investors re-established bets that the US currency would continue to gain on monetary-policy divergence between the Federal Reserve and other major central banks. USD/JPY is also supported by the higher US Treasury yields (2-year at 0.613% versus 0.565% late Wednesday), demand from Japan importers and ultra-loose monetary policy of the Bank of Japan . But USD/JPY gains are tempered by the Japan exporter sales, selling of yen crosses amid diminished investor risk appetite (VIX fear gauge rose 0.72% to 14.07, S&P 500 closed 0.49% lower at 2,089.27 overnight) as Philadelphia Fed's March manufacturing index came in weaker-than-expected at 5.2 versus forecast of 7.0 and positions adjustment ahead of weekend.

Technical comment:
The daily chart is still negative-biased as the MACD and stochastics are bearish, although the inside-day-range pattern was completed on Thursday.

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 119.95. A break of this target would push the pair further downwards, and one may expect the second target at 119.65. The pivot point is at 120.35.

Resistance levels:
121.10
121.55
121.85

Support levels:
119.95
119.65
119.25