USD/JPY pressured as 30-year Treasury yields approach 5% on deficit concerns

The 30-year US Treasury yield has climbed back toward the psychologically important 5% level, currently trading at 4.97%, as markets focus on mounting US deficit concerns and potential trade tensions under Trump's policies. This yield surge has paradoxically weakened the dollar in Asian trading, with USD/JPY falling 0.4% to 156.20 as risk sentiment deteriorated. The persistent inflation worries and fiscal sustainability questions are creating volatility in bond markets, with the 10-year yield also rising to 4.62%. Japanese investors have been net sellers of US Treasuries, contributing to yen strength despite the yield differential. Technical indicators show USD/JPY facing immediate support at 156.00, with a break below potentially accelerating losses toward 155.50. The ongoing deficit debate and trade policy uncertainty suggest continued pressure on US bonds, though any sharp yield spike above 5% could temporarily reverse dollar weakness if risk aversion intensifies.