USD/JPY spent much of May on a downward path, falling from a high of 131.35 to a low of 126.35, dented by the pullback in U.S. government rates. However, the correction in the U.S. dollar was short-lived, with the pair resuming its explosive rise this month, reaching a two-decade high of 134.47 today after posting solid gains over the past four sessions. The rally in the last several days has coincided with the rebound in U.S. yields, which has been sparked by a reassessment of the Fed’s monetary policy outlook (both the 2-year and 10-year yield are back near their cycle’s high). For instance, markets had expected ... (full story)