USD/JPY Rallies on Rising Yields and Oil Prices

The USD/JPY currency pair has been recovering from its recent lows, reaching around 155.00 in morning trading. This level is both technically and psychologically important, and a clean break above it could lead to further gains.

US Treasury yields have pushed above 5% for the first time since 2007, driving up the dollar and putting pressure on the yen. The resulting rise in US-Japan yield differentials is also contributing to the pair's rally.

The Federal Reserve's decision on Wednesday is a key factor in the USD/JPY outlook, with expectations of a 25 basis point rate hike. However, if policymakers validate expectations for another increase later in the year, it could keep the dollar supported for an extended period.