The pair is making fresh lows on the day in a drop to 135.83 in European morning trade. This comes as we see Treasury yields stay on the retreat with 2-year yields down 9 bps to 3.106% and 10-year yields down 9 bps as well to 3.210%.

The fall in USD/JPY doesn't quite distract from the breakout move yesterday but if sellers can push past the previously broken high in June of 135.59, then perhaps we could see a drop back towards testing 135.00.

I'd still argue that on the balance of things, it is looking like another technical breakout towards 140.00 looks likely but the bond market needs to play ball. However, in the event where markets are solely focused on the souring risk mood and bonds are also bid, that will help keep the yen in a better spot.

For now, buyers still have the edge but if we do see a further retreat to the technical levels mentioned above, then perhaps there needs to be some consideration that yesterday's breakout may prove to be a fake out instead.