Economists at MUFG Bank expect USD/JPY to benefit as debt ceiling fears ease.

USD/JPY takes the lead 

“With monetary easing priced in at a relatively early stage of the curve, improved risk can come to support the Dollar. When the source of the improved risk is US-specific, the catalyst for USD strength is more compelling. That source of course is the improved optimism over the potential for a debt ceiling deal being reached soon after President Biden returns from the G7 in Japan. Rhetoric from both Biden and Kevin McCarthy suggests progress.”

“USD/JPY would in our view be the currency that would fall most in a scenario of debt ceiling related turmoil and in that sense it is not a surprise to see it as the biggest mover higher within G10.”

“137.77 and 137.91, the May and March highs respectively, are the key levels and an imminent breach of these highs look more likely now.”