The Japanese yen ended Tuesday as the strongest of the majors once again, but experienced some seriously choppy price action as the currency actually fell very sharply during the European trading session. However, risk aversion reared its head once again during the US trading session, taking the DJIA down 1.3 percent to end the day just above the psychologically important 8500 mark. Meanwhile, the latest commentary from the Bank of Japan (BOJ) was optimistic, but didn’t have much of a direct impact on price action. As expected, the BOJ left rates unchanged at 0.10 percent, but they also upgraded their outlook for the second straight month, saying that “economic conditions…have begun to stop worsening.” That said, the BOJ also noted that downside risks remain for the economy and for inflation, which are contingent upon “future developments in the global financial and economic situation.” Ultimately, the Japanese yen remains a crucial component of the FX carry trade, and the currency’s moves are likely to remain tied to market-wide risk trends rather than fundamental forces.