The Japanese Yen is stronger against every major currency except for the Australian dollar as the reversal in the Dow triggers the reversal of long carry trades.
This will continue to be the primary driver for the Yen since the Japanese economic calendar is devoid of any significant economic data. Both the leading and coincident numbers released last night were right in line with expectations. The weakness in carry trades could be limited by the fact that many of the central banks in question such as the Reserve Bank of Australia, Bank of England and Canada are still set to raise interest rates again this year. Wider rate differentials are beneficial for carry trades.