Societe Generale Research flags a scope for USD/JPY to decline further in the near-term.
"This morning, lower yields and a brighter mood has prompted a pretty uniform reaction, with the dollar down against all the G10 currencies and almost all the others too, with the exception of the Turkish Lira, and since that's up by over 3% against everything else in 2021, it can be forgiven a pause," SocGen notes.
"However, the most interesting currency, for once, is the yen. It continues to show that it's more yield-sensitive than risk-sensitive, and if we do get a pause in the bond market sell-off, the overbought fall in USD/JPY can go further. So too, can the yen's rally on other crosses," SocGen adds.