Japanese Stocks Are Crashing As USDJPY Loses Critical Support

Tyler Durden's picture

Investors said Sayonara to the crucial 102.00 level for USDJPY tonight and while S&P 500 futures are leaking lower (down 7 points from their earlier highs), the Nikkei 225 has collapsed over 430 points and is pressing one-week lows. This is the lowest the Nikkei 225 has been relative to the Dow in 8 months.


The S&P has retraced the post-European close rally and decoupling from JPY moment in today's day-session...


But the Nikkei 225 is collapsing tick for tick as USDJPY loses 102 once again...


As the Nikkei 225 is now at its lowest price relative to the Dow for eight months...


The NKY/SPX relationship implies either notable JPY strength (to 97 against the USD), a significant rally in the Nikkei or a major drop in the S&P in order for the 16-month global macro tourist trade to revert to the mean...the last time the FX and equity markets were this decoupled was when the Nikkei collapsed (and mean-reverted) in May 2013.


With the Nikkei at one-week lows, its now 700 points below the post-Yellen exuberance.

The broader TOPIX Index is down 4.25% from Tuesday's post-Yellen highs.


Could be a lot more pain to go if CFTC CoT data on JPY shorts is anything to go by...


Charts: Bloomberg

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SilverIsMoney's picture

As the metals truck away...

NoDebt's picture

That's pretty shocking, actually.  How long has it been since that was last a common utterance?  Almost 2 years, according to my foggy memory.

samcontrol's picture

The morning gold breaks 1304 and silver breaks 20,50 no ZH article...?

Wahooo's picture

ZH doesn't post positive financial news, even if it's metals. OTOH, if it's metals, is there really any positive financial news?

samcontrol's picture

ok flying thru 100day not important,

onewayticket2's picture

wahoo.  there's not much positive news out there.....but in the other 99% of the media, even the negative news is spun as positive. 

So, if you're looking for fake daisies and cnbc sunshine, you always have access to it.  if the real thing is what you seek, you're probably in the right place.

eclectic syncretist's picture

Looks like it'll be another great day for the miners, with silver up almost 3% overnight and gold having clearly broken out of it's bear market slump.

DoChenRollingBearing's picture

This whole Japan story has been virtually ignored outside of ZH.  I will be very interested to hear what some of our trader friends re Asia have to say.

But, even to a Bearing with Zero Brain, I can say this is not good.

Frank -THE COIN -'s picture

It is Amazing that so few Understand it. They go on to push the connection aside not knowing that they are intertwined.

NoDebt's picture

Japan is in the process of being jettisoned.  I could have said they have been voted off the economic island, but that would be rayciss and highly insensitive to the people of the world's (allegedly) 3rd largest economy.

mt paul's picture

the sushi


is over cooked..

eclectic syncretist's picture

Perhaps Kyle Bass will be proven right again.

Tasty Sandwich's picture

While I'm not a trader, I've found that often people who think they have a decent understanding of economics (or have taken a few classes in college or read Krugman's blog religiously) will point to Japan as proof that the US can keep borrowing and spending indefinitely.

So, a crisis in Japan is unthinkable to the "mainstream".

NoDebt's picture

I have a decent knowlege of Economics, since I'm an economist by training, and I believe no such thing.  I believe there is merely a time delay between Japan and the US.  Same play book, couple of decades difference in the timeline.

TahoeBilly2012's picture

"decades"?? You mean weeks??

NoDebt's picture

No, I mean decades.  Japan has shown that ~250% debt/GDP is where the wheels start to come off (having a printing press doesn't help you climb out any more).  We got a ways to go.

TahoeBilly2012's picture

Right...okay...sure...but for the fact the Dollar is the world's reserve currency and not the Yen and when Japan collapses the entire world debt ship sinks, where all eyes quickly focus on the dollar. I mean look, anything can happen....your idealistic sloooow repeat of Japan in US, is far fucking fetched,

DoChenRollingBearing's picture

Japan has been going down for some 25 years or so.  We have only been going down since 2007, a mere 7 years...

TahoeBilly2012's picture

Oh, you guys are kidding right? This is funny..haha, now I get it. The US has been going down since the Pinto came out. The only thing keeping it going has been moving factories to Asia, getting the world to love Brad Pitt and swallow dollars. What on earth would make you suggest that the US has X years to follow Japan to a collapse?? Japan might even  be preferable in a complete collapse for cultural reasons. Gimme break plz, 20 years, knee slappin' funny!!

mrmister's picture

Yes it will not take years only a day when it breaks. These economists don't take all variables into account. Just take a look at Georgia with the snow. And that is just snow.

Supernova Born's picture

Comparisons to Japan are absurd.

The Japanese could endure-with stoic discipline-stress that would have Wal-Mart nation driving their electric scooters off cliffs and EBT morons burning down their own section 8 housing in "protest".

all-priced-in's picture

A fucking snow storm causes the EBT crowd to start shooting each other over a loaf of bread.

I guess we need more government regulation of bakeries and grocery stores.

Someone needs to get Elizabeth Warren involved - people are suffereingt through no fault of their own.  


DeadFred's picture

We may see soon. USD is fast approaching multiyear trend support, somewhere about 80. It's always likely to bounce but if not it could be a quick trip to 73. Below there is chaos <cue creepy music for effect>

TruthInSunshine's picture

Yen @ 120 again before 80.

I realize this is highly contrarian.

TheReplacement's picture

Economy is symptom of disease, not disease itself.  USA, USA, USA very sick.  Many diseases.  Many disease near terminal.  Many disease debilitating. 

We better off if learn four ways to eat.  One can grow own, scavenge, start business, get job.  Effort must be made.  No free lunch is there.


One of We's picture

Okay guys give no debt a break.  He did admit to being a trained economist so thats all you really need to know....LM FAO....tell me again what the Ussa produces besides exotic financial book cooking, al-ciaduh terrorists, and very ugly politicians? Besides the firearm industry and the MIC we don't make much and that's just a snake eating its tail....

Offthebeach's picture

Couple of things. Japan doesn't have reserve currency. We do and I feel we have only yet begun to make the world scream.
Military and the will to use it.
We are almost energy sufficient.

So this continental clown car can with more dictatorship go a lot longer

Wahooo's picture

Yep, the sky falls slowly.

Bindar Dundat's picture

First real debate on ZH for months -- thanks for the insights and my investing position will be on the slow fall side.  

Tasty Sandwich's picture

I said people who think they have a decent knowledge of economics.

The comparisons between the US and Japan are, in my view, shaky at best.

The benefits of the USD as a reserve currency aside, Japan's debt was largely internally funded and they ran consistent trade and current account surpluses until recently.

Japan's savings rate was nearly 20% at one point, allowing for that internal funding. 

The US runs consistent trade and current account deficits.

The US savings rate probably hasn't exceeded 10% in decades and a quick glance at FRED has it at 3.9% for December 2013.  Japan's savings rate has fallen significantly since the turn of the century.

Carpenter1's picture

Right Tasty, two completely different economic realities. Just the fact that the US is the reserve currency changes everything, all dynamics. How can you compare a nation whose currency is used worldwide with one whose currency is primarily national? 101 different moving parts to consider.



BandGap's picture

Erosion is non-linear. The US started eroding at the same time as Japan, just that we have slightly thicker walls.

Japan and the US are Siamese twins -no matter how healthy one is, if the one dies it's a short time till the other goes, as well.

Offthebeach's picture

I'm not sure how savings rates are calculated, but Amrticans are certanly not Japonese. We're way more animal spirited, savage, rough, knock around take another hit of meth, how fast does that thing go people. We are resources rich continent, in spite of the algores. No one, any where has our size, resources natural and human, our near billion population ( mexico, L America, ...)and comparatively civil politics. Also our political loserers aren't as corrupt and killerish as others political losers.

LostPolarBear's picture

So are you saying that the US can keep this up for another couple of decades?



TahoeBilly2012's picture

I suppose they are using Detroit as example A...next thread plz.

Carpenter1's picture

Globalism 101- When one goes, we all go. That's the plan BTW.

syntaxterror's picture

Sorry folks, I had to reboot the HFT server. She should be back in the green now.

whisperin's picture

Damn I can't believe I'm first to say it.... are we gonna witness a Valentines Day Massacre?

Grande Tetons's picture

I am betting on the Irish...Saint Paddy's Day.

Beware the ides of March, Seamus. 

March, 2000. Ahhh, the good ole days when PALM was the momo du jour. 


LetThemEatRand's picture

No POMO today, thus the carnage (though delayed).

DoChenRollingBearing's picture

Hmm...  Makes me wonder if tomorrow might be her first test...



Comic Relief Moment:

Two liars are standing on a bridge peeing into the water below.

One of them says "That water sure is cold!"

The other says "And that water's deep too."


Comic Relief Moment Two:

Q: How do you get 30 drunk rowdy Canadians out of the pool?

A: You ask them. 

LetThemEatRand's picture

And the banker says, "That water almost splashes all the way up here."

DoChenRollingBearing's picture

Banker, Liar, what's the difference?

Oh!  No joke, sorry....

LetThemEatRand's picture

Just jump.  Fucking cum guzzling world destorying narcissistic sociopath banker wastes of human skin.