USD/JPY Breakout in Jeopardy as Yen Weakness Concerns Grow

The USD/JPY currency pair is facing pressure as it falls back towards the 158.00 level, threatening to undermine yesterday's technical break.

This comes despite elevated Treasury yields, which remain at 5.17% and have touched a high of 5.22% overnight. The selloff in the bond market has accelerated this week amid stronger US economic data and poor bond auction demand, further pushing markets towards a higher-for-longer rates view.

The breakdown of yesterday's breakout is being attributed to concerns about yen weakness, which have been raised by Japan finance minister Katayama. Tokyo continues to stress coordination with Washington on FX matters, citing the principles behind July's joint intervention as remaining in place.