Global economic news, particularly in Asia, is improving and equity markets are rallying.
That might make one believe that the Yen should be growing stronger.
Instead, the Yen is weakening against the Dollar and the Euro.
How does that make any sense?
It makes sense because the improving news in the equity markets is increasing risk appetite, and that means that the major currency crosses are going up.
In other words, the rally that we are seeing has to do with emotional buying instead of a fundamental or technical driver.
This does mean that the rally we are seeing will turn around in a big hurry if the equity market rally loses its legs.
