The tape looks great this morning. Amazon's blowout has the tech trade roaring back, Korea's market ripped overnight, and all three of our momentum readings are green again. But the thing actually holding this up is shakier than the screen makes it look.
Japan is the reason, and it's worth understanding.
Their finance ministry stepped into the currency market yesterday. The yen had been grinding down toward levels it hasn't touched in 40 years, and they moved to prop it up, buying yen and selling dollars to do it. The dollar had its worst day in about four years off the back of that, down roughly 3%.
That's the part that reaches us. A weaker dollar loosens financial conditions, and that's a real piece of why stocks took off yesterday and why they're still bid this morning. So the rally we're enjoying is, in part, a product of Japan defending its currency two days ago.
The reason we don't lean on it is that the move doesn't fix anything underneath. The yen keeps falling because Japan's inte