Japan's nikkei tumbled 3 percent pushing the yen higher as foreign investors sold the Japanese currency to hedge their equity positions. Rabobank's Senior Currency Strategist Jane Foley says that the yen is a lot weakier than it once was.

SHOWS: LONDON, ENGLAND, UK (NOVEMBER 17, 2014) (REUTERS - ACCESS ALL)

1. RABOBANK, SENIOR CURRENCY STRATEGIST, JANE FOLEY, SAYING:

JOURNALIST ASKING JANE FOLEY: I guess the yen-nikkei correlation is working as it should, right?

FOLEY:'This is exactly what happens is a really strong correlation between dollar/yen and the nikkei right now. And as you say, it's explained by the fact that equity holders do hedge their positions with the yen. But we've got to remember that although the dollar/yen rate did come off those overnight highs, the yen is a lot weaker than it was. There has been a lot of monetary stimulus injected potentially into the Japanese economy through the exchange rate. And I think right now that is probably the only really glimmer of good news for the Japanese government.'

JOURNALIST:'And when are we going to see that come through, this yen weakness support the economy?'

FOLEY:'Well of course, we should begin to see it coming through in the external balance quite soon. But of course, there's a couple of caveats and that is of course, global growth isn't what we thought it would be by now. We've got a situation where the markets are a little bit gloomy about the prospects for Chinese growth and of course, Europe hasn't really showed very much signs of growth at all this year. So it's more difficult to be optimistic about the Japanese external balance when you see these large parts of the world still very much mired in gloom. But of course, the other thing that many Japanese business leaders have been concerned about is energy. We do have to remember that Japan does have to import a huge amount of its energy requirements since the closure of its nuclear power stations. But of course, that pain has been eased by the fact that oil prices are lower.'

JOURNALIST: 'Draghi testifying in the European Parliament today. I mean it's this waiting game we've seen been playing. Any clues on QE, do you think?'

FOLEY: 'I think the market will be watching just in case there are any clues, but I doubt if he's going to go any further than he went at the ECB policy meeting just a couple of weeks ago. Back then, he said that the staff members at the ECB were perhaps preparing the way, doing some research and I don't think it can go much further than that. We still have to see how the ECB gets on with expanding its balance sheet by the measures that have already been announced. And that's still quite early days, and I think we really will have to wait another few months at the very least before we get any more concrete signs that the ECB will announce their quantitative easing.'

JOURNALIST: 'So where's euro/dollar going?'

FOLEY: 'Well of course, we've seen it coming back. The dollar/yen I think led the way today. We saw the dollar strengthen a bit and that pushed the euro/dollar a little bit higher. But I do think this is a slow burner even though I think the market might be getting ahead of itself in pricing in that first Fed hike. Even though the Fed I think could slow the pace because there isn't any inflation in the U.S. to speak of, I do still think that euro/dollar will decline albeit perhaps a little bit slower than many people in the market anticipate.'