NZD/JPY 28 Oct. 2009

The NZDJPY pair advanced several percent on strong risk appetite and the latest interest rate scare before this week's start. But the latest, very steep sell-off suggests that the tide may be turning here. A significant breach of the 66.00 area in the coming weeks would help confirm that the high is in for the pair. The correlation of NZDJPY with the S&P500 in Q3 was 0.91 - very high - so any downside view will need a weak stock market, and steady to lower interest rates as well.