30 Aug
Yen pressure and relief
We see the Japanese Yen (JPY) playing an ever increasingly important role in the American markets during this low volume August trading. As one floor trader has said, “It’s evident that the trade between the Yen and the S&P futures are directly inverse with this lack of activity.”
This chart illustrates the directly inverse relationship between the Yen’s strength and US market weakness this week. This relationship exists because of the carry trade. It will be important to keep watching this trend until the Federal Reserve speech Friday at 10:00AM, when traders will be paying much more attention to Dr. Bernanke.