FAST FIVE: Nomura: China Holds The Key To Japanese Yen

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Government wants pick-up The key government-driven measures of infrastructure investment and credit appear to have reached a trough after a year of weakness, but have yet to establish a firm upward trend (Figure 1).

The strongest correlations with Chinese stocks are all yen crosses.

This means that any weakness in Chinese stocks should see yen strength, especially through these crosses.

US equities and oil prices have positive correlations too, but they are less stable.

As expected copper prices have a positive correlation, though surprisingly iron ore is negatively correlated.

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