USD/JPY To Consolidate With Risks Skewed Higher

USD/JPY to consolidate with risks skewed higher. Pair underpinned by JPY-funded carry trades amid positive risk sentiment (VIX fear gauge down 2.93% at 23.19), modest Wall Street gains overnight (DJIA up 0.49%, Nasdaq up 1.06%) on larger-than-expected 6,000 drop in latest U.S. weekly jobless claims (vs forecast for 3,000 fall), surprise 5.2% rise in U.S. July pending home sales (vs forecast for 1.0% drop). USD/JPY also supported by USD demand for import settlements, higher U.S. Treasury yields. But USD/JPY gains tempered by Japan exporter sales, less-than-expected 0.1% rise in July U.S. factory orders (vs +0.2% forecast), revised 1.8% decline in U.S. 2Q non-farm productivity (vs original estimate of 0.9% fall); caution before 1230 GMT U.S. August non-farm payrolls (expected to have fallen 110,000 vs 131,000 decline in July) & unemployment rate (expected to be 9.6% vs July''''s 9.5%). Other data focus: 1400 GMT Fed''''s Lockhart speaks, 1400 GMT U.S. August ISM non-manufacturing report on business. USD/JPY daily chart mixed as MACD flat, stochastics still in bearish mode; inside-day-range pattern completed yesterday. Resistance at 84.55 (yesterday's high), then at 84.66 (Wednesday's high); breach would expose upside to 85.06 (hourly chart), then 85.92 (Monday's high), 86.39 (Aug. 13 high) and 86.79 (55-day moving average). Support at 83.98 (yesterday's low), then at 83.67-83.58 band (Wednesday's low-Aug. 24 low); breach would expose downside to psychological round-numbered levels from 83.00 down to 80.00, then 79.70 (record low set April 19, 1995).