The yen… It seems every time the yen strengthens, investors in Japanese stocks rush to price in the move. Last time Japanese shares traded, the dollar was sitting comfortably above ¥104, but this morning it was just above ¥103, having dipped into the upper ¥102 range during U.S. hours. (The euro-yen cross rate wasn’t much prettier for Japanese exporters, slipping under the ¥141 handle overnight before recovering a bit during the Asian day.)
Conventional wisdom says dollar-yen is weaker because the dollar fell back on concern about the much-weaker-than-expected jobs numbers from last Friday. In turn, some analysts — TD Ameritrade chief strategist J.J. Kinahan, for example – have blamed the poor December jobs results partly on bad weather in much of the country last month.
Therefore, Japanese stocks are down because North America got a lot of snow recently?
Who knows — Edward Lorenz, the late meteorologist and founding co-father of Chaos Theory, famously said that weather is so easily influenced that a butterfly flapping its wings in China can make subtle changes that create storms in America a few weeks later.
So maybe it’s just a group of rogue butterflies that are causing the sell-off in Tokyo. Or not.
win trade for Jan13:
USDJPY
4H chart:
1H chart:
