The October panic is hitting more than the world's equity markets; it is hitting the currency markets, too.

Europe now finds itself in that terribly uncomfortable position that no matter what the monetary authorities do regarding interest rates, it shall be detrimental to the currency.

The yen continues to weaken, as it should, given the continued weak economic data coming from Tokyo.

A rally such as we've witnessed in the past week needs a correction. The market shall be healthier in the new year because of it.

Japan needs a weak yen. We have argued that case for months, and finally it is proving of merit.

Friday's intervention efforts seemed long over-due, well organized and much needed. They shall prove fruitless, however, for of course the long-term economic reforms that Europe is in need of are only now, rather reluctantly, being put into effect, and only in small doses rather than materially.