The Nikkei has fallen sharply, almost 10%, in the last month and has done so while other regional bourses like the Kospi have gained ground. Traders are now very nervous that, after a very wobbly session on Wall Street, the Nikkei may even fall more sharply again today. This in turn will put pressure on the JPY crosses for the reasons I mentioned earlier, market positioning and fear.
AUD/JPY has slipped back under 81.60 from a NY close around 81.85. EUR/JPY has also fallen 15 pips. I think it might be a case of ‘watch-the-Nikkei’ today.
