Yesterday, there was a high profile article in the Wall Street Journal that talked about how correlations across financial markets are beginning to break.

One of the correlations mentioned was USD/JPY and the S&P500.  For the past 24 hours, it appears that the correlation is still holding as the rally in stocks drives USD/JPY above 107.  We continue to believe that oil and stocks will be the primary driver of the FX market this week.  Japanese economic data was surprisingly strong with convenience and supermarket store sales beating expectations.  However despite this improvement, the Japanese economy still faces more downside than upside risks.