USD/JPY Climbs as Treasury Yield Rout Deepens Post-Auction
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The Treasury market selloff that intensified Thursday after a soft 30-year auction and an underwhelming buyback operation from Secretary Bessent is filtering directly into USD/JPY flows. Rising long-end yields widen the interest rate differential between US Treasuries and Japanese Government Bonds, a core driver keeping dollar-yen bid.
With the Bank of Japan still anchored near ultra-low rates, any acceleration in US yields tends to accelerate carry trade demand for the pair. Traders are watching whether this yield spike proves durable or fades as auctions stabilize.
A continuation of the bond rout raises the odds of USD/JPY testing fresh multi-week highs, while a yield pullback could quickly cap upside momentum.