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/JAPAN/KOREA: *** Traders noted........>

US TSY FLOWS: /JAPAN/KOREA: *** Traders noted black box funds have been buying
Tsys in the correlated trade today as Japanese yen rises vs US$, in the US Tsys
buy/yen buy/US$ sell/stock sell trade (and they do reverse trade when dollar
rises but dollar just off the day's lows). "The algos have that relationship
working, and they are using it right now," said one trader. "But this does not
make sense. It's the most asinine trade I've ever seen: Japan is right next to
N.Korea," so to rush into Jpn yen as a safe-haven trade is risky due to
geographics involved, said the trader. 
- But a different veteran trader said the US$/Yen/Tsys correlated trade is "the
only thing" going on as "market is very quiet." Tsys market "went up overnight
on those N.Korea headlines" about N.Korea dictator threatening to set off a
hydrogen bomb, he added. 
- This has caused "trading shorts" who set shorts after the FOMC meeting and
hint of December tightening, to have to cover positions into the weekend, he
added. He argued against the idea that buying yen amid N.Korea missile threat is
illogical, as "the yen is always a safe-haven" refuge.

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