After the Rally: Stocks Resume Digestion

European finance officials have called this week for discussions about the weak Japanese yen. Paulson has said he believes the markets should decide currency values, and China's currency is the key issue for the U.S., notes Marc Chandler, chief forex strategist at Brown Brothers Harriman and a RealMoney.com contributor. Chandler adds that Canadian officials haven't indicated that Japan or China are focal points for them in the upcoming meeting, and U.K. officials have said they want the fundamentals to drive the currency markets as well.

But with the European hue and cry over the weak yen, if the G7 makes no mention of the Japanese currency in its postmeeting communique, the very absence of any comment could ignite another wave of carry-trade enthusiasm. If traders pile back into yen, that just means more liquidity ... and more stock market rallying?