FX:USDJPY   U.S. Dollar / Japanese Yen
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When analysing the USDJPY             this positive correlation cannot be ignored. Sometimes it is very precise, sometimes not quite so much, but it is there. The causality would appear to be that the Nikkei determines where this pair goes, although it may be simply symbiotic. And though the Nikkei has a certain independence, stock markets are globalised. An overlay of the Russell 2000 I think demonstrates this sufficiently.
All things considered, Fed Taper included, begs a fundamental question to any long term bullish viewpoint. How can the Yen weaken that much, say to 106.00, against the Dollar if it depends on a synchronous rise in the Nikkei, and by default global stock markets? Esp             . if any 'Non-Taper' action will inevitably continue to weaken the dollar. Taper will weaken stock markets. And on these simple points much is trapped. Little surprise therefore the USDJPY             is a little cornered.
I understand the correlation flipped from negative to positive post 2008. Why? I've not read any good explanation.
A proposal: the markets being a complex self-regulating system reversed the correlation as the mechanism to hold in check, and possibly eventually correct, the distortion created by the intervention of central banks.
I think it likely this pair will continue into the corner. Or at least there is no significant northward movement.
(The fork, the fan & the Fib happen to be what I am currently using to analyse the price movements/resistance etc. I calculated by 'golden ratio' there should be a 'phase shift' approx. 29th this week). (PS. Just noticed that coincides with US GDP :)
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