Higher yields and a positive risk backdrop are the perfect mix for USD/JPY gains and that's exactly what's unfolding today. US 2-year yields are now up 14 bps to 2.60% and the S&P 500 is up 1.7%. That's combined to lift USD/JPY nearly 200 pips to 128.94. The intraday high of 128.99 was just touched and that's the best level since 2002.
The monthly chart is beginning to look like a gigantic inverted head-and-shoulders pattern. If so, we will one day be talking about 200.00 -- something we haven't seen since the mid-1980s.
