USD/JPY inches towards the year's highs, underpinned by rising Treasury yields

Amid the surge higher in yields, the pair is looking buoyed as buyers also capitalise on a technical break above the resistance region of 110.60-80.

This now calls into question the highs for the year @ 111.64-66 and a break above that is likely to open up the path towards further upside momentum in the pair.

The 112.00 level offers some resistance in the more immediate horizon but beyond that, there isn't much until we get to 114.00, where there is a swing region resistance that limited gains from May 2017 through to November 2018.

At this point, the surge higher in yields looks to be one that is accompanied by growing stagflation worries as energy prices are soaring. In Europe, Dutch natural gas futures are up nearly 12% and German electricity prices are at a fresh record high.

The energy crisis is emanating globally and that is starting to have a stronger impact on markets, with bonds a particularly sensitive one considering the links to inflation.

One chart to watch out for in all of this is CAD/JPY as the loonie will be relatively buoyed by soaring energy/commodity prices: