* USD/JPY trimmed gains that saw it hit a new 29-month high of 126.65 in Asia following a worse-than-expected BOJ tankan survey for March. USD/JPY eased to an intraday low of 125.68 after Miyazawa said FX moves in the last week have been too rapid. The Asian WSJ cited a Bush official saying the U.S. would not tolerate a weaker JPY if Japan did not tackle the bad-loan situation seriously.
This was taken as a USD/JPY negative, but could just as easily be a positive as it leaves a door open to further JPY weakness providing Japan keeps its word on debt reforms.
In Europe, BOJ new board member Suda said she was neither a monetary hawk nor dove, while hinting she will let markets decide FX levels.
USD/JPY recovered back to 126.65 in early Europe, aided by EUR/JPY buying, before gapping down to 125.99 twice.
The outlook is bullish, with resistance seen at 127.28.

Support: 125.67 (overnight low), 125.50 (Gann 50-point pivot; targets: 125.00/126.00), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 121.05 (Gann 50-point pivot; targets: 120.55/121.55), 122.14 (20-day moving average), 119.65 (Gann 50-point pivot; targets: 119.15/120.15), 119.00 (38.2% Fibonacci retracement level of the August 1998-December 1999 downtrend), 118.61 (60-day moving average).
Resistance: 126.65 (overnight high; 29-month high), 127.28 (resistance line rising since October).