It's all about the bond market in this case, as outlined here earlier. Here's a look at the chart for some background on the latest push in USD/JPY from around 134.30 earlier to 135.10 levels now:
We are seeing mixed markets to start the new week with equities looking subdued alongside bond prices with yields holding higher. 10-year Treasury yields are up 5 bps to 3.539% and that is underpinning yen pairs ahead of European trading.
However, the dollar is slightly softer across the board on the balance of things, only sitting higher against the yen. I reckon this might be a case of the tail wagging the dog and we could see other dollar pairs switch around later on in the day if broader market sentiments stays as it is.
For USD/JPY, the bigger picture continues to center around its 200-day moving average for now and buyers are putting in some fight after what looked like a breakdown below the key level at the end of last week:
