I believe people still confused between $JPY and $USDJPY.
1. when I mention $JPY, it is an index
2 $JPY index was calculated from all currency pairs against $JPY
$AUDJPY, $EURJPY, $USDJPY etc.
3 both $USD & $JPY are safe-havens
4 both up = risk-off
5 both down = risk-on
1. when I mention $JPY, it is an index
2 $JPY index was calculated from all currency pairs against $JPY
$AUDJPY, $EURJPY, $USDJPY etc.
3 both $USD & $JPY are safe-havens
4 both up = risk-off
5 both down = risk-on
6 if market crashes, $JPY & $DXY would both be up
7 $USDJPY is the relative strength between 2 safe-havens.
8 if $USD up more than $JPY, $USDJPY be up
9 if $JPY up more than $USD, $USDJPY be down
10 In a severe flush, #9 would be the case
11 but, AUDJPY is a better indi for #10
7 $USDJPY is the relative strength between 2 safe-havens.
8 if $USD up more than $JPY, $USDJPY be up
9 if $JPY up more than $USD, $USDJPY be down
10 In a severe flush, #9 would be the case
11 but, AUDJPY is a better indi for #10
When FX traders mentioning
1 Yen
2 Aussie
3 kiwi
4 cable
5 loonie
6 swissy
they really mean : (relative to USD)
1 USDJPY
2 AUDUSD
3 NZDUSD
4 GBPUSD
5 CADUSD
6 USDCHF
so,
Yen = USDJPY not JPY index.
same as others.
1 Yen
2 Aussie
3 kiwi
4 cable
5 loonie
6 swissy
they really mean : (relative to USD)
1 USDJPY
2 AUDUSD
3 NZDUSD
4 GBPUSD
5 CADUSD
6 USDCHF
so,
Yen = USDJPY not JPY index.
same as others.
When I hear people say
Yen is very strong
what does it mean?
Does it mean
$USDJPY is strong?
1 implying $JPY is weaker than $USD
2 but $JPY could be stronger than EUR, AUD or GBP
or
$JPY index is strong?
To avoid confusion, I never use "Yen"
$JPY = index
$USDJPY = pair
Yen is very strong
what does it mean?
Does it mean
$USDJPY is strong?
1 implying $JPY is weaker than $USD
2 but $JPY could be stronger than EUR, AUD or GBP
or
$JPY index is strong?
To avoid confusion, I never use "Yen"
$JPY = index
$USDJPY = pair
There were many times I mentioned in my posts
1 Risk off = $SPX down = $USD & $JPY both up
2 if $USD up more than $JPY ==> $USDJPY also up
3 when $USDJPY up, which gives a wrong signal as risk-on
4 wrong. $JPY up & $USD up = huge risk-off
5 rel str of 2 safe-havens is misleading
1 Risk off = $SPX down = $USD & $JPY both up
2 if $USD up more than $JPY ==> $USDJPY also up
3 when $USDJPY up, which gives a wrong signal as risk-on
4 wrong. $JPY up & $USD up = huge risk-off
5 rel str of 2 safe-havens is misleading
The rel str of a safe-haven & risky currency is always clear:
1 $JPY up, $AUD down => $AUDJPY down = risk-off
2 $USD up, $NZD down => $NZDUSD down = risk-off
3 $CHF up, $EUR down => $EURUSD down = risk-off
4 $USD up, $CAD down => $USDCAD up = risk-off
clear & no confusion.
1 $JPY up, $AUD down => $AUDJPY down = risk-off
2 $USD up, $NZD down => $NZDUSD down = risk-off
3 $CHF up, $EUR down => $EURUSD down = risk-off
4 $USD up, $CAD down => $USDCAD up = risk-off
clear & no confusion.
below correlation of SPX & risk-on risk-off FX currency pairs
See the correlation between:
safe-haven & risky: high corr 1 yr & less;
especially in times of stress
1 SPX & AUDJPY
2 SPX & AUDUSD
3 SPX & USDCAD
safe-haven & safe-haven
USDJPY low corr
See the correlation between:
safe-haven & risky: high corr 1 yr & less;
especially in times of stress
1 SPX & AUDJPY
2 SPX & AUDUSD
3 SPX & USDCAD
safe-haven & safe-haven
USDJPY low corr
Regression analysis
Risky vs risky:
$SPX vs $AUD = positive correlated
Risky vs risky:
$SPX vs $AUD = positive correlated
Correlation bar chart for all time periods:
