Fundamental Outlook:
USD/JPY is expected to range-trade. It is undermined by the weaker dollar sentiment (ICE spot dollar index last 99.19 versus 99.67 early Thursday) after a surprise 0.6% on-month drop in US February retail sales (versus forecast +0.2%). USD/JPY is also weighed by the lower shorter-dated US Treasury yields (2-year at 0.664% versus 0.688% late Wednesday) and Japan's exports. But the USD sentiment is soothed by fewer-than-expected U.S. jobless claims of 289,000 for the week ended on March 7 (versus forecast 305,000), a higher-than-expected on-month rise of 0.4% in U.S. February import price index (forecast +0.2%). USD/JPY downside is also limited by the yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge eased 8.6% to 15.42; S&P 500 closed up 1.26% at 2,065.95 overnight) as the weak report on US retail sales gives the Fed more leeway to hold off before raising rates. USD/JPY downside is also tempered by demand from the Japanese importers, the ultra-loose Bank of Japan's monetary policy and positions adjustment ahead of the weekend.

Technical comment:
The daily chart is still positive-biased as the MACD is bullish, stochastics stays elevated at overbought levels, 5- and 15-day moving averages are advancing.

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 120.90 and the second target at 120.60. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 122. A break of this target would push the pair further downwards, and one may expect the second target at 122.50. The pivot point is at 121.65.

Resistance levels:
122
122.50
122.75

Support levels:
120.90
120.60
120.20