Please disperse, there's nothing to see here

We reaffirm that exchange rates should reflect economic fundamentals. Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to
monitor exchange markets closely, and cooperate as appropriate. In emerging economies with large and growing current account surpluses, especially China, it is desirable that their effective
exchange rates move so that necessary adjustments will occur.
- Essen G7 communique

So much for the weak yen as cause celebre. Of course, there was some side chatter on carry trades and the necessity for markets to understand that they are not a one way ticket to Paradise. Fellas, given that real money investors ain't short yen and that even the gross (as opposed to net) spec yen longs on the IMM are above their 1,3, and 5 year averages, consider the message delivered.

We also met with Ministers of Finance from a number of key emerging market economies to discuss the role of local bond markets in fostering growth and financial stability. In this
context developing local currency bond markets deserves higher priority to reduce emerging countries' vulnerability to external shocks and financial crises and to promote growth.

Uh, guys? You do realize that the only reason that developed market investors generally buy these local currency bonds is to earn carry, right?

Macro Man expects the yen to weaken and high yielders to trade fairly well on Monday morning at the very least. However, he would be wary of chasing these moves, given the high volume of data and other events risks on the week.

Macro Man will return on February 19. Good luck!