But FX isn't playing by the old rules—because the yen isn’t being traded on economic virtue, it's being rented out for yield.

The Japanese yen jumped early Monday, catching traders off guard just hours after Ishiba’s ruling party suffered a historic blow in the upper-house election.

The 10-year U.S. yield is its highest in eight months, the '2s/10s' curve is the steepest in nearly three years, and the 30-year yield is within 10 basis points of 5.00%. It has climbed 60 bps in ...