Overview:

USD/JPY is expected to consolidate with the bullish bias after hitting one-month high at 102.56 this morning. It is underpinned by the weaker JPY sentiment on comments from Bank of Japan Gov. Kuroda that the BOJ won't hesitate to take action if risks to central bank's 2% inflation target materialize, and that there are ways to further ease monetary conditions, news that Japan's $1.2 trillion Government Pension Investment Fund will consider raising its allocation of stock investments. USD/JPY is also supported by the stronger-than-expected +0.7% increase in U.S. April factory orders (versus +0.6% forecast), rise in ISM-New York current business conditions index to 55.3 in May from 50.6 in April, rise in U.S. IBD/TIPP Economic Optimism Index to 47.7 June from 45.8 in May and higher U.S. Treasury yields; demand from Japan importers. But USD/JPY gains are tempered by the Japan exporter sales and broadly weaker USD undertone (ICE spot dollar index last 80.54 versus 80.63 early Tuesday) and diminished risk appetite (VIX fear gauge rose 2.5% to 11.87, S&P 500 slipped 0.04%, DJIA off 0.13% overnight) as caution sets in ahead of Thursday's European Central Bank's interest rate decision and Friday's U.S. non-farm payrolls report.

Technical comment:
Daily chart is positive-biased as MACD and stochastics are bullish, five-day moving average is above 15-day MA and is advancing.

Trading recommendation:
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 far as the price is above its pivot point, a long position is recommended with the first target at 102.80 and the second target at 103.10. In the alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.25. A breach of this target will push the pair further downwards and one may expect the second target at 102. The pivot point is at 102.45.

Resistance levels:
102.80
103.10
103.45

Support levels:
102.25
102
101.75