Asia x/Japan equities began to to work off overbought conditions.
Japan’s Nikkei continues to reprice higher on weaker yen. Italy’s MIB and Spain’s IBEX experiencing the “positive contagion” from Eurozone sovereign spread compression and now approaching an 80 RSI.
Profit taking in the dollar/yen was met by buyers. We could be wrong but this move feels different and $/yen may remain overbought for a while. Note we have changed to the market convention of quoting $/yen rather yen/$.
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