• USD/JPY gains traction for the second straight day on Monday amid broad-based USD strength.
• Bets for a 25 bps Fed rate hike in June push the US bond yields higher and underpin the buck.
• Fears of an intervention lend some support to the JPY and could cap further gains for the pair.

The USD/JPY pair builds on Friday's strong intraday positive move and gains some follow-through traction for the second successive day on Monday. The pair maintains its bid tone through the first half of the European session and currently trades around the 140.25-140.35 region, just a few pips below a four-day high touched in the last hour.

The post-NFP US Dollar (USD) recovery from over a one-week low remains uninterrupted on the first day of a new week and is seen as a key factor acting as a tailwind for the USD/JPY pair. Despite the mixed US jobs data released on Friday, the markets are still pricing in the possibility of another 25 bps rate hike by the Federal Reserve (Fed) at its policy meeting later this month. This, in turn, remains supportive of a further rise in the US Treasury bond yields and continues to underpin the Greenback.

The Japanese Yen (JPY), on the other hand, is weighed down by a more dovish stance adopted by the Bank of Japan (BoJ). Apart from this, the prevalent risk-on mood - as depicted by a generally positive tone around the equity markets - further dents the JPY's relative safe-haven status and lends additional support to the USD/JPY pair. That said, the prospect of Japanese authorities intervening in the markets helps limit deeper losses for the JPY and caps any further gains for the major, at least for now.

This, in turn, warrants some caution for aggressive bullish traders and before positioning for any further intraday appreciating move. The fundamental backdrop, however, suggests that the path of least resistance for the USD/JPY pair is to the upside. Trades now look to the US ISM Services PMI, due later during the early North American session. Apart from this, the US bond yields will drive the USD, which, along with the broader risk sentiment, should provide fresh impetus to the major