Everything aligned for USD/JPY and it stumbles again
USD/JPY is trading at the lows of the day as it hits stops below 112.40 and eats into yesterday's gains.
On the surface, everything looks good for the pair. Stocks have been on a non-stop run in the US and Japan, risk appetite is positive today with S&P futures up 9.5 points and volatility is low in a holiday-shortened week. Yet the pair can't hold a bid.
It's been a consistent theme this year; the pair has disconnected from many of correlations.
One spot of trouble is the bond market and especially the yield curve. The 2-10 spread is down to crisis-era lows and that has some market-watchers spooked.
