This trade plays into the current spike in U.S. bond yields and stronger USD demand following the surprise legal ruling on Trump-era tariffs. As Treasury yields rise on fears of larger deficits and tariff refunds, USD becomes more attractive. Meanwhile, JPY remains weak in a rising global yield environment, especially with the Bank of Japan holding policy loose. Political and fiscal volatility in the U.S. adds to uncertainty, but near-term price action supports USD strength vs low-yielding currencies like the yen.

Key Catalyst: U.S. court ruling weakens trade policy certainty and lifts yields bullish USD, bearish JPY.

LONG USDJPY

Jun 03 2025