An emergency easing by the Bank of Japan may have backfired overnight as the Yen erased its early losses against the major currencies. The BoJ made the move in the hopes it would weaken the Japanese Yen, but instead it’s business as usual this morning with the Yen sharply higher versus the U.S. Dollar.

Late this morning the BoJ said it would expand its current 20 trillion Yen quantitative easing program to six-months from its current three-month time frame. It also increased the amount of funds available by 10 trillion Yen.

The moves expressed by traders this morning seem to indicate that the trading public perceives the activity by the BoJ as too little, too late as the action suggests the central back is being reactive instead of proactive.

Technically, after an attempt to breakout to the upside through the last swing top at 85.91, the USD JPY is now trading sharply lower. The last main bottom at 83.59 seems safe at this time, but could be challenged later in the day if 84.75 cannot hold today’s break.

U.S. Equity markets are expected to open flat to lower this morning after an earlier rally fizzled. Friday’s reversal bottom following a successful test of 1037.00 in the September E-mini S&P 500 was a strong sign that the market liked Bernanke’s comments on Friday. Today investors will have to decide whether traders were buying value or just producing an oversold technical bounce. Should the rally regain steam today, look for the September E-mini S&P make a run at 1082.25.

The threat of another hurricane later this week combined with a pick-up in demand for higher risk helped drive December Crude Oil higher last week. Last night the market had a bit of a follow-through but it weakened just short of a major 50% price level at 78.41. With the main trend down, look for traders to sell the rally into this retracement level.

Technical factors, slow demand and building inventories are likely to pressure crude oil throughout the week. The only surprise will be the hurricane. Traders will react throughout the week depending on which direction the hurricane decides to take.