The EUR/JPY currency pair, which expresses the value of the euro in terms of Japanese yen, is a traditionally recognized barometer of risk sentiment in global markets. For similar reasons to the USD/JPY pair, changes in EUR/JPY spot prices tend to correlate positively with risk-on activity (i.e., if EUR/JPY falls, it is likely that risk assets such as U.S. equities will find pressure).
The chart below shows the recent relationship between EUR/JPY (the green line, set against the far-right y-axis, illustrates the moves in EUR/JPY spot prices) and S&P 500 futures (the current-month contract, as