The pop in yen crosses is finally breathing some life into the FX market.
The weekly EUR/JPY chart is a good one to watch right now. The euro ran higher broadly after EUR/JPY broke the February high and now it faces the October and May 2021 highs.
Rising yields are the story here with German 10s up another 6 bps to 0.51%, which is the highest since 2018. That spread is growing over Japanese 10s, which are up 1 bps to 0.23% today.
For the most part, I think today’s move in the yen is payback after the market was caught sleeping on the move in yields yesterday on a Japanese holiday but aside from EUR/JPY, there isn’t much in the way of resistance on any front (or in yields).