New Zealand Dollar Tumbles vs Japanese Yen on S&P 500 Tumbles

Written by David Rodriguez, Quantitative Strategist
A pullback in the S&P 500 has fueled a fairly sharp rally in the Japanese Yen, with the highly-correlated New Zealand Dollar/Japanese Yen pair the biggest mover among G10 currency pairs. Indeed, the correlation between the S&P and the NZDJPY trades near record-highs—underlining JPY traders’ sensitivity to financial market risk sentiment.
Barring a substantial shift in market dynamics, we would continue to expect both the New Zealand Dollar and the Japanese Yen to trade off of broader moves