The Yen has now rallied to the 95 level which was about where I expected it could get to before a pullback. If the Yen pulls back it will take a tremendous amount of pressure off the carry trade and the general market. However don't be fooled even though the rally today was impressive we are still in a bear market and the longer term trend for the Yen is still up. As long as this continues the 1.2 trillion dollars in carry trades are going to continue to unwind on rallies. Once the Yen consolidates and then starts another leg up I would look for the bear to return and probably in an even fouler mood. Unless the BOJ decides to reverse policy and devalue their currency this will continue. Expect to see oil strengthen if the Yen pulls back for any appreciable time also.
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