It's an ugly day in the carry trade barometer

NZD/JPY breaks down

NZD/JPY is a classic measure of the risk trade. The high-yielding kiwi and low-yielding yen are at the heart of the carry trade.

The pair is rough shape today, as Justin pointed out earlier. The August low broke earlier and the drop has extended to 1.35%.

The uptrend since the Brexit vote is now under pressure. It comes in at 78.57 today with the market now only 10 pips higher.

Earlier this month, I highlighted that 61.8% retracement level and it bounced off it but the bounce is over. It came after lower growth forecasts from New Zealand along with the tinge of risk aversion in broader markets.