The QE Clash: JPY Vs USD

There is now news of possible additional QE from BoJ - that means that there would be dilutive effects on the JPY. With the USD already getting diluted due to QE2, this is an interesting trade to watch, USD / JPY.

"The news of possible additional QE from the BOJ sent USD/JPY  higher in Asian trade with the pair hitting 82.40 before profit taking capped the pair. Despite the tonight’s rally, the price action in the pair is likely to remain subdued until Wednesday’s FOMC meeting as traders await the communique from the Fed."

Statistics Source: fx360.

Now for the dollar to get stronger, Bernanke should signal the end of QE2 and rule out QE3. Will that happen? We will wait and watch.