After Japan’s Tankan disappointed greatly and various talking heads from Japan came out to deliver the credibility-destroying-phrase of the day: that “the economic recovery is progressing smoothly” despite all evidence to the contrary… USDJPY took a dive. And when USDJPY takes a dive, all its risk-on, carry-trade-imbibed friends take a dive. Dow futures cratered 230 points in minutes only to bounce back modestly when some enterprising sell-side analyst reminded the machines that “bad news is good news.” But that didn’t last and US equity futures are sliding rapidly in the overnight session…

Dow futures have retraced all of Monday’s 3-step-gains and are down over 400 points from the Monday highs…

and across all US equity futures, things are ugly heading into Europe…

And all because… fun-durr-mentals…

Charts: Bloomberg