USD/JPY correlation with US yields in focus

USD/JPY pulls back from a fresh yearly high (137.91) to largely mirror the weakness in US Treasury yields.
The correlation coefficient with the 10-Year yield currently reads 0.91, with USD/JPY approximately 7% higher from the yearly low (127.23).

Long-Term Outlook
A key reversal took shape earlier this year as USD/JPY bounced back ahead of the May 2022 low (126.36).
The positive slope in the 200-Day SMA (137.47) indicates that the long-term outlook for USD/JPY is tilted to the upside.

Short-Term Outlook
USD/JPY may stage further attempts to test the December 2022 high (138.18) as long as it holds above the monthly low (135.26). Close above 137.70 (38.2% retracement) opens up the 143.10 (23.6% retracement) region.
However, failure to hold above the 200-Day SMA (137.47) could signal a near-term exhaustion as USD/JPY pulls back from a fresh yearly high (137.91). Move below the monthly low (135.26) may push USD/JPY towards 133.30 (50% retracement).

Additional Resources:
USD/JPY outlook mired by failure to test December high
Trend AnalysisUSDJPY

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