The last 2 hours of trading in U.S. equities markets caused massive "RISK-OFF" moves as the FED minutes revealed that the FOMC could start unwinding its huge Balance Sheet sometime toward the end of the year......possibly selling both Treasuries and MBS (mortgage backed securities). This is the first time that reducing its balance sheet has been mentioned in its "minutes". Some FED officials also mentioned that equities are "QUITE HIGH". This is also highly unusual, as most FOMC members defer from commenting about the stock markets (maybe FED officials are becoming more vocal because the whole Trump Bump/reflation trade has gotten overheated/over-hyped). The fact that the FED minutes revealed members are uneasy about stock market valuations and the possibility about reducing its balance sheet is a GAME CHANGER. All 4 indices (S&P500, DOW, NASDAQ and RUSSELL 2000) were significantly in positive territory before diving in the last 2 hours of trading, after the FED minutes were made public.. The S&P dropped around 26 points and the small cap Russell index went from being UP over 1% to ending the day DOWN 1.45%, while the VIX index (fear index) jumped up about 18% during that same time period. The JPY pairs dropped in sync with equities, further emphasizing the "risk-off" move in markets.

Here's the S&P 500 chart Nikkei futures are pointing to a significant GAP DOWN, which should cause the JPY pairs to move even lower. What I'll be watching for is Tuesday's low of 18,701 in the Nikkei Index. If that level gives way and the move lower is sustained, I expect JPY pairs to dive lower. I'm currently SHORT GBP/JPY and USD/JPY.
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