The Japanese Yen crosses are up across the board as the Dow Jones Industrial Average hit yet another record high on an intraday basis. The persistent rally in the US stock markets coupled with the strong performance of the Asian markets overnight is keeping risk aversion high.
This means that speculators are continuing to hold onto their yen funded stock trades. The relationship between the Dow and carry trades is so strong that traders have completely ignored the stronger Japanese data released overnight. The current account surplus hit a record high while the CGPI inflation index jumped from 2.0 percent to 2.2 percent year over year. This suggests that we could see a stronger GDP number and hawkish comments from BoJ Governor Fukui after the monetary policy meeting scheduled later this week.