The currency markets did an abrupt shift on Friday, as the dollar turned negative for the first time in a week, giving back most of the gains it had slowly accumulated since last Monday.

But the dominant story in the markets remained the Japanese earthquake and tsunami. My thoughts and prayers certainly go out to the people of Japan. The pictures of the wall of water and debris rolling across the landscape is shocking. And the destruction may not be over, as a couple of nuclear plants are still not under control. As I wrote Friday, the disaster has boosted the Japanese yen (JPY) to trade near its record high. The highest I have seen the yen trade was back in April of ’95 when I worked at Mark Twain Bank and saw the yen trade at 79.75 per dollar. Interestingly, this followed the 6.9 magnitude earthquake that rocked Kobe, Japan in 1995. I heard a couple of reporters using the Kobe earthquake as a basis to predict a sharp appreciation of the yen in the coming months; and I can see why they would make the comparison. The Japanese yen shot up over 20% in 1995 during the three months following the Kobe earthquake, and Friday we saw the yen move up about 1.25% versus the US dollar.