The yen addiction
Case in point: The yen came into today's U.S. session trading weak. That's because the Bank of Japan kept interest rates unchanged and because BOJ Governor Toshihiko Fukui said interest rates will stay relatively low for some time. But this afternoon, the yen started getting frisky again. And wouldn't you know? The Dow started giving back some of its gains.
Since that's the case, we have to ask ourselves: Where is the yen headed next? That depends on what Ben Bernanke and his Fed buddies have to say tomorrow. Do they talk tough because the latest inflation reports, to put it bluntly, sucked? Or do they talk easy because they're worried sick about the housing and mortgage market problems? Any sign of weakness in the Fed's inflation-fighting resolve would likely whack the dollar. Stay tuned -- the Fed's latest statement will come out around 2:15 p.m. tomorrow.