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Clear-cut Proof that US Markets Are Trading Off of the Yen

There’s been a lot of debate as of late about how Japanese markets are affecting markets around the world. For the first part of the downward leg in the Nikkei, it barely found its way on to US investors’ watch lists. That has largely changed this week and Thursday, we’re seeing clear-cut evidence that US investors are trading, in part, off of the yen.

The chart below shows that as the yen broke through key technical levels and rapidly gained strength against the dollar, the S&P 500 moved lowered with it. The yen currently sits at 96.49 against the dollar. This indicates a strengthening of about 2.6 percent against the greenback.

This not only indicates a correlation with a market on the other side of the world, it also signals that the market is continuing to lose confidence in its ability to move higher.


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