Weaker Japanese machinery orders should have exacerbated the rallies in the yen crosses today but on a day with so much volatility in the Dow, we actually saw limited activity in the yen crosses.
At one point, the Dow Jones industrial average was up as much as 135 points, but it ended up giving back close to 100 points to end the day up only 37 points. Perhaps traders are worried about the Bank of Japan rate decision tonight. No interest rate hikes are expected, but the prior record in the Japanese current account surplus and jump in CGPI suggests that growth may be enough to warrant tighter monetary policy in the near future. The 4.5 percent drop in machinery orders is worrisome, but the number tends to be very volatile.