Secular Change Signal: Yen and Gold

Stocks have outperformed gold when USDJPY is rising.

The yen (JPYUSD) and gold have been positively correlated. Gold broke higher in 2019 and into the March 2020 peak, but the correlation came back. In a yen breakdown scenario, there should be another divergence as in 2019. Gold could follow the yen lower for a variety of reasons. A "good" inflation scenario with strong global growth or a deflationary wave would both weigh on gold. They could both rise in a dollar breakdown scenario. As I laid out in yesterday's post, I am looking for a yen bear market. That would be secular change from the past forty-plus years and with that should come a break in yen and gold.

Also watching the yen in the context of gold-copper as well.