Japanese Yen crosses have had a varied reaction to the volatility in the Dow today. USD/JPY and CAD/JPY came under aggressive selling pressure, while EUR/JPY and CHF/JPY are higher.
This tells us that traders are just selling US dollars and not all risky assets. Depending on which Yen crosses that you buy, the carry trade could still be working. EUR/JPY hit a new record high, which is a trend that we have seen often. When the Dow first broke the Bear Stearns low in late June, EUR/JPY also rallied to a new high. Looking ahead, the Bank of Japan is expected to leave interest rates unchanged at 0.5 percent as the economy continues to suffer.