The dollar/yen is in a clear breakdown falling 10 yen in a few weeks. Risk aversion after the Nikkei’s tumble into bear market territory can only rise until the pair consolidates. The question is where will that be?. While Japanese officials put on brave faces, the market is not buying into Abenomics despite Friday's "stabilization". Exporters and corporates are now adjusting of necessity for yen strength. Market talk is exporters who were hoping for 105 and didn't act at 100 thinking it would bounce back are now using 95 on which to base contracts. The BOJ meeting was just the latest disappointment with nothing new being offered. The challenge in the bond market is interesting given Japan’s large debt. A rise in yields makes things even more difficult in stoking growth. In the interim one-month yen volatility spiked to its highest since March, 2011. Perhaps the answer for the Japanese lies in dollar strength. For now, Japanese policy makers must be hoping for a consolidative base.