From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
In recent weeks, the market has taken a risk-off tone as dollar-denominated risk assets have come under increasing pressure.
Major US stock indexes have pulled back, and procyclical commodities such as crude oil and copper continue to chop around beneath overhead supply.
Interestingly, we haven’t seen much of a bid in defensive assets through the recent bout of downside volatility. US treasuries have been relatively quiet, and the dollar remains below its August highs. Meanwhile, bond-proxy sectors like Utilities and Staples continue to make new relative lows.
None of this suggests the kind of defensive positioning that would be typical in an environment where risk assets are getting hit.
But what about one of the most significant safe-haven assets of all… the Yen?
Let’s take a look at how the Japanese Yen is setting up against other major currencies right now and what it could mean for the market at large.