With all of the attention brought to the yen by its outspoken leaders, it seems many looking at the problems in Japan lose track of the fact that its value to the dollar is a two-way street. But, the dollar is not only strengthened by Japan's weakness, its value will rise in part to its own fundamentals. As reported by REUTERS yesterday: A number of Federal Reserve officials think the central bank might have too slow or stop buying bonds. This announcement was quickly reflected in sharp drops in the DOW Jones Industrial Average, S&P 500, Euro, and... Sorry one second, I though I put the yen somewhere but, nope, the yen strangely increased after this announcement. One may argue that this was due to Japan's Prime Minister Shinzo Abe's own pronouncement that Japan would not need to resort to buying foreign bonds but this surely is just a slight of hand. After the G20 meeting last week, Japan was awarded a green light for its fight against deflation while other monetary weakening moves would not be tolerated.

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