Japan’s Toxic Triple Shock: Yen, Oil, And Surging US Yields

Japan at the line

The Nikkei has retraced to the trend line that has defined Japan’s bull market, just as the 100-day MA gives way. A stronger yen, higher oil and rising US yields have created a toxic mix, while market breadth remains narrow.

But this is not yet a full trend break. Medium- and long-term CTAs remain long, the key unwind levels sit lower and the latest JPY move may have overshot. Japan is now at the point where a correction either finds support, or becomes something much bigger.