Pro: Japan's Currency Poses Risks To U.S. Stocks

What affect does the Japanese yen have on U.S. equities? According to Wells Fargo Securities Strategist Gina Martin Adams, the answer may be surprising.

Speaking during Monday's segment "Bloomberg Markets," the strategist began by pointing out the yen is "representative of some very confusing inter-market trends with respect to U.S. stocks."

"The yen is rising and the dollar is falling," she explained. "Yet U.S. Treasury yields weren't rising, TIPS spread stop rising so when you put all of that together you get a mix that is not that friendly for stocks usually."

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Martin Adams added that U.S. stocks have recently undergone a correction, but the conversation is now shifting to central banking policies and what they will do across the world. As such, U.S. stocks are also dependent on global central bank policies, including the Bank of Japan and European Central Bank.

She expanded that when Japan's central bank "stepped in" earlier this year, it resulted in a rally in the country's currency, which represents the opposite response from the market they had hoped for.

"It's not just the yen, it's central banks around the world and a volatility around the world and a lot of volatility in currencies that are plaguing US stocks more than anything else," she added.