Correlations- USD>JPY-DOW, EUR/JPY Follows etc | Forex Factory

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Correlations- USD>JPY-DOW, EUR/JPY Follows etc

  • #1
  • First Post: Mar 7, 2007 6:59am Mar 7, 2007 6:59am
Hi There,

I have been watching closely how the DOW has been leading almost point for point increases/decreases in the USD.JPY pair. In relation to this the EUR.JPY pair tends to follow the USD>JPY pair during the NY hours. Once the Nikkei kicks in its that indicie that leads the 2 two pairs.

Now please bear with me, is this a normal trend path or is there more of a correlation due to the Carry trades crisis? or is this a normal correlation between the indicies and the currency pairs?

Also in addition to the above if there is a correlation between the DOW/NIKKEI on the pairs is there one that is correlated to EUR/USD as that pair tends to go in directions of its own regardless of the USD.JPY/EUR.JPY pairs.

Sorry just to add this is not my trading methodolody or strategy simply an education imput to add. knowledge is power-

keep using the charts

thanks

kevlot
  • #2
  • Jun 21, 2007 3:02pm Jun 21, 2007 3:02pm
Quoting kevlot
Hi There,

I have been watching closely how the DOW has been leading almost point for point increases/decreases in the USD.JPY pair. In relation to this the EUR.JPY pair tends to follow the USD>JPY pair during the NY hours. Once the Nikkei kicks in its that indicie that leads the 2 two pairs.

Now please bear with me, is this a normal trend path or is there more of a correlation due to the Carry trades crisis? or is this a normal correlation between the indicies and the currency pairs?

Also in addition to the above if there is a correlation between the DOW/NIKKEI on the pairs is there one that is correlated to EUR/USD as that pair tends to go in directions of its own regardless of the USD.JPY/EUR.JPY pairs.

Sorry just to add this is not my trading methodolody or strategy simply an education imput to add. knowledge is power-

keep using the charts

thanks

kevlot
This was a correlation that also struck me a few months ago, when there was a big sell off in the indices, and on the 14th March as the indices reached their lowest point, so it was a relative minimum for the USD/JPY. Though USD/JPY had had its lowest low PRIOR to the indices.

This may be interesting if your also trading the indices. Especially since volatility there these days now can easily compete with volatility in FX, with rallies of 1500 and more pips...
  • #3
  • Jun 26, 2007 8:41am Jun 26, 2007 8:41am
hi. Interresting, but what is the application of this correlation? How do you use it? if the correlation occurs at the same time, it holds no value. does it have predictive value for you? cheers
  • #4
  • Jun 26, 2007 3:50pm Jun 26, 2007 3:50pm
Quoting kevlot
Also in addition to the above if there is a correlation between the DOW/NIKKEI on the pairs is there one that is correlated to EUR/USD as that pair tends to go in directions of its own regardless of the USD.JPY/EUR.JPY pairs.
Although I trade USD/JPY only, the correlation between the New York Dow and NIKKEI seems to be generally accepted among Japanese stock investors. Currently, they also pay attention to Chinese stock prices. Generally speaking, if USD/JPY is bought(yen becomes more weaker), export-related shares(Toyota Motor, Kyocera etc.) would be bought with sense of safety.

In Japan, not only NHK but also commercial TV stations always report the prices of NIKKEI, DOW, USD/JPY and EUR/JPY every half to one hour as a newsflash, these quotes are familiar for some reason even children.
Peace and Happiness through Prosperity (by Konosuke Matsushita)
  • #5
  • Jun 26, 2007 4:04pm Jun 26, 2007 4:04pm
Quoting Fumafuma
Although I trade USD/JPY only, the correlation between the New York Dow and NIKKEI seems to be generally accepted among Japanese stock investors. Currently, they also pay attention to Chinese stock prices. Generally speaking, if USD/JPY is bought(yen becomes more weaker), export-related shares(Toyota Motor, Kyocera etc.) would be bought with sense of safety.

In Japan, not only NHK but also commercial TV stations always report the prices of NIKKEI, DOW, USD/JPY and EUR/JPY every half to one hour as a newsflash, these quotes are familiar for some reason even children.
fumafuma - I'm curious how the Japanese see the China stockmarket, particularly Shanghai. We can't play it directly over here (I'm in Canada), but indirectly through ADR's. Also any thoughts on how it might relate to FX? Thx...
  • #6
  • Jun 26, 2007 4:10pm Jun 26, 2007 4:10pm
This is the site which B.N.F always watches during trading Japanese stocks.
http://www.w-index.com/
B.N.F (his pseudonym. He is a Japanese young man) is most famous as a Japanese stocks day-trader in Japan. At the beginning of May, I introduced his information to FF members on this site.
Attached Image (click to enlarge)
Click to Enlarge Name: WS000297.JPG Size: 148 KB
Peace and Happiness through Prosperity (by Konosuke Matsushita)
  • #7
  • Jun 26, 2007 4:35pm Jun 26, 2007 4:35pm
Quoting Fumafuma
This is the site which B.N.F always watches during trading Japanese stocks.
http://www.w-index.com/
B.N.F (his pseudonym. He is a Japanese young man) is most famous as a Japanese stocks day-trader in Japan. At the beginning of May, I introduced his information to FF members on this site.

Aren't those 30 minutes delayed and static?

I have a live DJI futures and DAX feed, but I still am desperately looking for a LIVE feed on asian indices (Hang-Seng and Nikkei). Any help would be appreciated, just shoot me a PM or post it here.
Trust price. Know yourself.
  • #8
  • Jun 26, 2007 4:54pm Jun 26, 2007 4:54pm
Quoting SeekingLight
Aren't those 30 minutes delayed and static?

I have a live DJI futures and DAX feed, but I still am desperately looking for a LIVE feed on asian indices (Hang-Seng and Nikkei). Any help would be appreciated, just shoot me a PM or post it here.
I use these

Shenzhen: http://www.szse.cn/main/en/marketdat...esperformance/ (pick SHSE-SZSE300 INDEX as main benchmark)

Nikkei: http://www.nni.nikkei.co.jp/CF/FR/MKJ/
  • #9
  • Jun 26, 2007 5:31pm Jun 26, 2007 5:31pm
Quoting cesarnc
I use these

Shenzhen: http://www.szse.cn/main/en/marketdat...esperformance/ (pick SHSE-SZSE300 INDEX as main benchmark)

Nikkei: http://www.nni.nikkei.co.jp/CF/FR/MKJ/

I need a live and updated feed. Like DJI future contracts via MT4.
Trust price. Know yourself.
  • #10
  • Nov 27, 2007 7:23am Nov 27, 2007 7:23am
Hi Seeking Light

Can I know where did you get the feed from?

Thanks
  • #11
  • Nov 27, 2007 7:27am Nov 27, 2007 7:27am
Quote
Now please bear with me, is this a normal trend path or is there more of a correlation due to the Carry trades crisis? or is this a normal correlation between the indicies and the currency pairs?
There has been a lot of correlation between the stock markets and yen carry trades for quite a while. If you check the historical dow charts against some of the yen pairs, u will see very close correlation.
  • #12
  • Nov 27, 2007 7:32am Nov 27, 2007 7:32am
Hi

Actually I do notice the correaction. And I can get the charts from bloomberg...

but they do noy have live RSS feeds. As per Seeking Light, there is live DAX and futures feeds.

THanks
  • #13
  • Last Post: Nov 27, 2007 7:58am Nov 27, 2007 7:58am
Quoting u0301466
Hi Seeking Light

Can I know where did you get the feed from?

Thanks

Using NorthFinance for the market quotes of S&P, DJI and DAX.

Windsor also has some futures including DJI and S&P but really sucks, because it's down often
Keep in mind futures prices and real prices aren't identical, but run parallel once both are open pretty much.
Trust price. Know yourself.
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