The Japanese yen has traded very choppily lately, but remains below its October 24 highs where the low-yielding currency ran into critical resistance versus most of the majors. One of the key trends we’ve been following in the forex markets has been the power of investor sentiment, as bouts of risk aversion have led to sharp gains for the Japanese yen and have triggered major losses for US stock markets. Indeed, the inverse correlation between the Dow and the yen (and US dollar) has been something we’ve been noting frequently. As long as this link holds and volatility stays high, my bias will remain in favor of Japanese yen strength. Related Article: Japanese Yen May Rally Through GDP Numbers on Carry Flows