Many of the gains of the past 2+ years have come in the overnight session, and the action the past two nights are par for the course.  The indexes really did not do much in the actual session yesterday as most of the gains came right at the opening bell, and then stocks chopped and flopped most of the day.  Last night, the G7 made a rare coordinated strike to weaken the yen, which equity futures reacted strongly to - futures had been down materially before the move.  This again highlights how difficult markets have become, even if you are correct on a prediction of a move as headlines, interventions, and action in the overnight session cause many a headache.

Specific to the action on the yen, the currency has been surging as a global carry trade unwinds - however, being a massive exporter, the Japanese do not want a strong currency.  Indeed, it appears almost no country wants a strong currency as each central bank is doing its best to dilute theirs.  Got gold?


  • The Group of Seven nations have agreed to a secret protocol to guide their coordinated intervention and won’t reveal it in order to keep currency markets guessing, according to people familiar with the matter.
  • The suggestion from these sources and the G7 statement is that the intervention could continue for a while and markets will have to guess at the exchange rate level for the Yen - or some other metric - that is the goal of the intervention by the world’s leading economies in the Yen.
  • The statement from the G7 specifically says that the intervention to weaken the Yen will take place Friday but goes on to suggest it could be more open-ended, reading, “We will monitor exchange markets closely and will cooperate as appropriate.”
  • The historic decision to conduct coordinated intervention came together as markets were closing on Thursday but was the product of almost 48 hours of intense talks between Europe, the US and Japan.