It wasn’t that long ago that the USD/JPY (that is, the US dollar and Japanese Yen exchange rate) had pretty much a 1.0 correlation with our own equity markets. If it was up half a percent, the S&P would be up half a percent. If it was unchanged, we were unchanged. You get the idea.
Lately, though, our own equities continue to defy every logical reason to go lower. Below is a graph of the USD/JPY. If I had shown you this chart a year ago and asked you to guess what equities had been doing, you’d probably correctly assume the Dow was down about 1500 points over the past month.
If nothing else, it’s heartening to see what happens with a central banker loses absolutely all credibility, because, I assure you, the chap in the picture above wanted exactly the opposite to happen with this chart, and he can’t seem to reverse its course.