USD/JPY moved higher despite the pullback in Treasury yields. The yield of 2-year Treasuries declined towards the 4.58% level, while the yield of 10-year Treasuries settled below 4.90%.

USD/JPY needs to settle above the resistance at 158.00 – 158.50 to have a chance to gain upside momentum in the near term. In this case, USD/JPY will head towards the next resistance, which is located in the 160.00 – 160.50 range. It remains to be seen whether BoJ is ready to provide support to the yen if USD/JPY tests the 160.00 level, but traders are worried about this scenario.