All of the Japanese Yen crosses are higher today with the exception of NZD/JPY which tells us that risk aversion could still be a dominant factor in the financial markets.
As the poster child of carry trades, the move in the New Zealand dollar should not be ignored. Furthermore the lack of a cohesive move in bond yields and the price action in the New Zealand dollar tells us that even though carry trades could move higher overnight, the rallies today are unconvincing, so watch out for a return to weakness.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com