USD/JPY has quickly slumped 50 pips to the lows of the day, just below 135.00. That puts the pair back to where it was at the start of the week.

The catalyst is the bid in Treasuries. US 2-year yields are down 7.5 bps to 2.98%. They rose as high as 3.43% last week but have been steadily retracing.

US 2s daily

Further out the curve it's a similar story with 10-year yields down 5.2 bps and near the session low at 3.10%.

Why are yields lower? Here's what BMO's rate strategists have to say:

Recessionary angst persists in the wake of Powell’s comments and the follow-through price action is encouraging for those
in the bond bullish camp. While the peak inflation assumption might be on shaky ground, the peak rates narrative has gained momentum as 3.50% in 10s appears increasingly likely to be the upper-bound.

Yesterday, Powell highlighted emerging downside risks to growth.He speaks again today starting at 10 am ET in his second day of Humphrey Hawkins testimony.