Risk aversion usually correlate with a stronger Japanese yen, especially when it has to do with risk aversion in Asian and especially when its significant. Indeed, the Shanghai Composite Index (SHA) fell from above 3500 in December to about 2655 in January, not to mention that it was above 5000- in June. We have seen price stall and pull back a bit in February, but the overall downtrend is still there. SHA (from Yahoo.com) EUR/JPY (click to enlarge) There is some similarity between EUR/JPY and SHA. For one, there was a June peak in both. The EUR/JPY is sliding sharply this week. We should anticipate the same in SHA, maybe not in lockstep, but with relatively strong correlation nonetheless.