I guess the reflation trade lives, sorta. There is renewed interest in EUR/JPY today which is prompting a major short squeeze in USD/JPY. This is certainly complicating matters for the folks that concluded yesterday that you could sell the dollar against anything and have success.
Money continues to stream into emerging markets and there is no riskier destination than that, to my mind, before a global recovery is well-established. Since we’re all looking for greener pastures outside the US, risj lives and that is by the forex market’s definition to sell the JPY.
Rising bond yields in the US and Europe are contributing to the JPY weakness as well, it would seem.
I have the rendline drawn at 132.87. That line was broken intraday the week before last, but we’ve yet to close above the line, which has been in place since late September.
