The market is starting to talk about 4.75 percent and the risk of the Fed perhaps moving to five and even beyond.
Right now it's all about the speculation that Japan will end its quantitative easing.
What we're seeing right now is the market take a bit of a breather. One thing we've seen in the past two days is yen weakness against the crosses and that probably has to do with the fact that the yen sell-off in the past week or so has been the sharper move.
People are holding their breath for U.S. numbers later today.
People are assuming that as an oil exporter, they're going to be diversifying away from the dollar. They may be positioning in case any foreign assets are frozen.
Once we do get the end of quantitative easing, it will be some time before we get an end to zero interest rates.
Since Watanabe made comments that's when the reversal started and it seems to be breaking higher against the dollar.
