The yen fell broadly on Monday as the U.S. stock market extended gains and benchmark Treasury yields rose.

The positive correlation between movements in the stock market and gains in the dollar against the yen over the past year has been fairly consistent. Equities and carry-trade currency pairs such as euro/yen and dollar/yen have risen and fallen together in recent sessions due to the perception of the relatively high risk that each investment holds.

In carry trades, investors borrow in a low-yielding currency to invest in higher-yielding assets.

On Monday, U.S. stocks rallied on bargain hunting, led by recently battered shares in financial companies. The recovery in stocks also sparked a rise in benchmark Treasury yields, now at around 4.74 percent.

Yen selling has basically come off the back of yen bulls getting flushed out and U.S. stocks surging currently with about (30 minutes) left in the stock market trading day, said a trader at Forex.com in Bedminster, New Jersey.

In midafternoon trading, the euro rose 0.9 percent to 164.05 yen, while the dollar climbed 0.8 percent from late on Friday to 118.91 yen.