FX.co ★ USD/JPY: Bearish bias

Overview:
USD/JPY is trading in lower range. The rate is undermined by unwinding of yen-funded carry trades amid increased risk aversion (VIX fear gauge rose 10.42% to 13.99; S&P rose 0.83% overnight) as weak purchasing managers' data from euro zone overshadowed strong China factory data, while worries festered over debt-troubled Cyprus as the nation worked to meet a bailout-related deadline, and U.S. existing home sales increased smaller-than-expected 0.8% in February; profit-taking on yen-shorts after Bank of Japan's new governor Kuroda Thursday renewed his pledge to expand monetary easing but stopped short of calling an extraordinary BOJ meeting this month to make a quick start with new easing measures. USD/JPY is also weighed by lower U.S. Treasury yields; Japan exporter sales. But USD/JPY losses tempered by positive USD sentiment after smaller-than-expected 2,000 increase in latest U.S. weekly jobless claims to 336,000 (vs. 340,000 forecast); rise in Markit U.S. flash manufacturing PMI to 54.9 in March from final 54.3 in February; stronger-than-expected 0.5% rise in U.S. February Conference Board's leading economic index (vs. +0.4% forecast); higher-than-expected rise in Philadelphia Fed index of general business activity to 2.0 in March (vs. minus 2.0 forecast) from minus 12.5 in February. USD/JPY downside is also limited by demand from Japan importers; expectations of aggressive monetary easing by BOJ in coming months to achieve 2% inflation target; positions adjustment before weekend. Event focus: 12:45 GMT Fed's Raskin speech.
Recommendation:
Sell below 95.3 with downside targets at 94.15 and 93.75.
Support levels:
S1 - 94.15
S2 - 93.75
S3 - 93.45 (Monday's low)
Alternative scenario:
Buy above 95.3 with upside targets at 95.6 and 95.9.
Resistance levels:
S1 - 95.6
S2 - 95.9
S3 - 96.11-96.13 (Thursday's high-Wednesday's high)
Technical comments:
Daily chart is negative-biased as MACD and stochastics are in bearish mode.