Yen rises as QE trumps Intervention

The forex markets were disappoints with the Bank of Japan's decision from today's emergency monetary meeting as it opted for more QE instead of direct currency intervention. The QE will take on the form of expanding fixed rate loans to banks by 10 trillion yen. The move was viewed as incremental because it was already on tap to expand the money supply by 20 trillion yen. Adding to strength in the yen were comments from Bank of Japan Governor Masaaki Shirakawa, who said after meeting with Prime Minister Naoto Kan that Kan had not made any requests regarding the central bank's monetary policy.

While the bank of England and the Fed have hinted about their intention towards renewed QE programs, today's move by the BOJ makes Japan the first country to inject more stimulus since the credit crises.