The 'odd' regime shift in the relationship between USD/JPY and US equities continues overnight. Following some visible-handedness and follow-through momentum, Yen is weakening against the USD - normally a big flashing green sign for risk-on pajama traders but China's biggest Yuan devaluation in 9 months (since the August turmoil) seems to have stolen the jam out of the bull's donut as US equity futures extend losses, AsiaPac credit risk jumps, and USD strength is weighing on crude prices.

China sent another strong message tonight...

Weighing on US equities...

Despite Yen weakness...

As the Correlation regime has shifted in Yen Carry...

It seems the message is loud and clear - Stop with the hawkish tone or else August happens again!!