Overview:
USD/JPY is consolidating after hitting four-month high of 80.38 this morning, as markets are waiting for 12:30 GMT U.S. 3Q advance estimate GDP. USD/JPY is underpinned by fears about impact of political stand-off over a JPY 38.3 trillion deficit-financing bill needed to keep the Japanese government funded. The Nikkei reported on Thursday that S&P had warned of serious implications for Japan's sovereign debt rating if there would be delay in the bill's passage. USD/JPY is also supported by weak JPY sentiment on expectations for aggressive monetary easing from Bank of Japan at its meeting on Tuesday and widening USD-JPY interest differential, demand from Japan importers. Yen-funded carry trades amid reduced risk aversion (VIX fear gauge eased 1.15% to 18.12; S&P rose 0.3% overnight) as U.K. reported unexpected growth of 1% in the third quarter, while U.S. jobless claims fell by 23,000 last week and U.S. durable goods orders jumped 9.9% in September (vs. +7.8% forecast). But risk sentiment dented by lower-than-expected 0.3% rise in U.S. September pending home sales (vs. +2.8% forecast); drop in Kansas City Fed manufacturing composite index to minus 4 this month from plus 2 in September; concerns over fiscally-strapped Spain and Greece; and Apple reporting below-forecast earnings after U.S. markets closed. USD/JPY gains also tempered by Japan exporter sales; concerns about U.S. "fiscal cliff" that could throw the U.S. economy back into recession; and positions adjustment before weekend.
Preference:
Sell below 80.2 with targets 79.69 and 79.4 in extension.
Support Levels:
S1 - 79.69 (Wednesday's low)
S2 - 79.4
S3 - 79.21-79.14 band (Monday's low-Oct. 19 low)  
Alternative scenario:
Buy Above 80.2, look for further upside with 80.35 and 80.6 as targets.
Resistance Levels:
R1 - 80.35
R2 - 80.63 (June 25 high)
R3 - 81.00 
Technical Comment:
The pair has broken below its support and remains under pressure. Stochastics stays elevated at overbought.