This is not at all good for Japan’s exporters. Already there has been “strong words” by Japan’s finance officials that they are ready to use extraordinary measures to protect the exporters through monetary policy. This plan is probably one of the reasons that the U.S. dollar is nearing the lows of the day and the Euro has held the $1.21 level against the USD.

Unfortunately, price discovery is a difficult process when governments continue to manipulate currencies. What looks like a strong move for the Euro can often be nothing more than Japan (of China or ?) selling the dollar (along with their own currency) and boosting the Euro. Clearly programs are set to bid up equities on this condition.

When will the day come that the continual tinkering in the markets by governments will stop? Never it seems, as long as they idea of unlimited money continues to be an acceptable practice.

Why is it that the U.S. only targets China as a currency manipulator? I bet Mr. Geithner is still walking around with that “letter” in his coat pocket, ready to wave it in front of any further Yuan weakness.