Dollar Bulls Weary Of Yields Backing Up And The Buck Backing Down

Now that the May month-end pricing and rebalancing shenanigans is completed, this market can get back to watching the Nikkei continue to paint the town 'red,' along with a stronger yen that's now worrying a few of the weaker short positions out there. This week the global data schedule is again busy. Market risk appetite will once again be considered the primary market driver that's expected to be heavily influenced by bond auctions and rate decisions.

Capital market's two most crowded trades continue to make headlines – long the Nikkei and short Yen. Last night, the Tokyo bourse managed to record its fourth decline in eight sessions amid the Yen's continuing strength. The stock average pared another -3.7%, to a six week low, mostly pressured by domestic Japan selling interest. In ten day's the Nikkei has fallen -17% as the dollar claws it way back towards that much watched psychological ¥100 mark. Japanese equities are not alone; investors and the Bank of Japan also...