The Japanese Yen has fallen dramatically during the past two months – developments in Japan have had a HUGE impact on markets around the world – a BIG market turn may be close.

The Yen has been rising against the US$ for 40 years…it began its last major rally in 2007…and despite forecasts from a number of high profile analysts (i.e. Kyle Bass) that it was going to take a big tumble it traded to All Time Highs in October 2011 before turning lower. It had an initial breakdown through the 5 year up-trend line in early 2012…rallied back to “kiss” the underside of the uptrend line…and then rolled over…gaining momentum to the downside around November 12, 2012…front-running the dramatic reflationary policies advocated by Abe as it became apparent that he was going to win the December elections. 

The Japanese Yen has tumbled as Abe has implemented VERY DRAMATIC REFLATIONARY MEASURES in an attempt to end two decades of deflation in Japan. He has put the Bank of Japan under intense pressure to increase the money supply and target 2% inflation. He has legislated massive government spending programs…and talks of much more to come.  These policies have had a powerful influence on markets around the world…it has been “Risk-On” in a BIG way.

Global Stock markets have been boosted by Japanese policies:

The S+P 500 closed this past week at  5 year highs…up ~10% from the Nov 16 lows. The higher beta small cap Russell 2000 is up ~15.5% during the same period to All Time Highs.  The TSE is up ~7%, the UK FTSE is up ~9%, the German DAX is up ~11% and the Japanese Nikkei is up ~26% to its best levels in 3 years.

Mid-November Key Turn Date:

I often refer to Key Turn Dates in the market…dates when a number of major markets all reverse course on or around the same day……

……read more HERE