Blame the US for the yen (apparently)
- The yen has weakened through 100 against the dollar, which might spoil the G7 finance ministers' weekend mini break. Perhaps they might have to do some work? Amari of Japan was quick to point out it reflected market confidence in the US economy.
- If the yen's move reflects market confidence in the US, it would imply a lack of confidence in Japan's economy. Japanese bonds have been volatile as well today, with JGB yields over 0.7%. Finance minister Amari has not yet suggested the bond yield move reflects confidence in the US economy.
- Fed Chairman Ben Bernanke is speaking on "monitoring finance" today, in the wake of further signals of an improving US labour market. The two things are not entirely unrelated - credit flowing to small businesses in the US is an important aid to job growth.
- There is little data in the European time zone, although Germany and the UK offer trade numbers. We published a note yesterday suggesting that the relationship between currency depreciation and GDP seems to be contingent not on trade, but on what exporters do with the profits from trade.
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