All about the yen

Yesterday's large stock market rally occurred in tandem with a massive rally in the U.S. dollar against the Japanese yen. The dollar rose from around 94 yen in the early morning hours of the New York session to an early morning high of 99.70 today. That was essentially the biggest rally in the dollar against the yen in 34 years.

It has the scent of coordinated central bank intervention (or at least Bank of Japan intervention) all over it, though we just don't know for sure. News leaked late yesterday that the BOJ might cut its interest rate target to 0.25% from the current 0.5% as well. That added some gasoline to the buck's rally.

All of this precedes today's U.S. Fed meeting on interest rates. Policymakers are widely expected to cut the federal funds rate by 50 basis points to 1% -- the same 1% policy rate that got us into the housing mess in the first place. There is an outside chance the Fed goes 75 basis points, but I'm not banking on it.