The market is understandably volatile as the market digests the NFP and the dilemma at the Fed.   The NFP shows that the weakness from the housing problems may be spilling over into the general economy.  5.0% unemployment rate is certainly the main worry for the Fed.  On the otherhand is the inflation risks which are moving higher as oil and commodities hit new highs.  All point to a lower stock market in my opinion as earning have to suffer.

The USDJPY plunged after the number to 108.17 then rebounded to a high of 108.73 - testing the 108.77 low from last night.  Since then a new low has been established with an extreme of 107.89. 

The pattern has been that the USDJPY stays under pressure as the stock market weakens (as GBPJPY and other JPY risk trade crosses get hit).  This is a situation the export driven Japanese economy will not like.  However, the speculation in the JPY and especially the continued speculation in the Yen"carry trade" crosses, may force more pain for the currency before stability returns and the USDJPY finds support.

The low for the USDJPY in November was 107.19 (the low close was 107.40).  Watch for these levels should the stock market head lower into the day.