Folks, consumer electronics shopping is gonna get a lot more painful this holiday season. The yen is rallying, the Bank of Japan is easing and the markets are shrugging:

Japan’s government offered a modest stimulus package Monday and the central bank took steps aimed at curbing the rising yen, but a tepid reaction from markets leaves policy makers under pressure to do more.

The 920 billion yen ($10.78 billion) stimulus is part of a double-barreled attempt to prevent the surging yen from undermining Japan’s fragile, export-led recovery. At an emergency meeting Monday, the BOJ’s policy board voted 8-1 to offer domestic financial institutions 10 trillion yen of six-month loans, in addition to the 20 trillion yen in three-month loans it has been offering.

The chairman of the Japan Automobile Manufacturers Association expressed hope the BOJ move will help weaken the yen. A strong yen makes Japanese products less competitive abroad, hurting key export sectors.

The move is largely considered to be the equivalent of throwing a bone (er…. a wonton?) to the local manufacturing industry, unlikely to have any long-term effect on the yen’s rise. If the BOJ wanted to make a significant impact, they’d need to buy bonds or get their ZIRP on. And they’re resisting that:

But he seemed to rule out one common suggestion: greater “quantitative easing” through stepped-up BOJ purchases of Japanese government bonds. “The current pace of outright government bond purchasing is the most appropriate,” Mr. Shirakawa said.

He also has resisted cutting policy interest rates, which have been at 0.1% since December 2008, to zero, fearing this would interfere with money-market functioning.

(Reports that a major car manufacturer threatened to point a number of recalled vehicles with so-called “accelerator issues” in the direction of the BOJ building if they failed to act are unsubstantiated at this time.)

In sum, get those Blu-Ray players and Lexuses while you can still afford ‘em, folks — it’s unlikely we’ll see a strong loller dollar vs. the yen any time soon. Much like the top in the euro was marked by supermodels demanding their contracts be paid in that currency, we’ll probably be able to call the top in the yen by waiting for 50 Cent to change his Twitter name over to @50¥, so I’m just going to wait for that to manifest.

As you probably know, there’s a vacancy at the Fed in the vice chair position. A frontrunner has emerged – Janet Yellen, currently at the SF Fed branch and a big fan of the ZIRPstravaganza:

Appointing Yellen, 63, who was unavailable for comment Friday, would reinforce Fed Chairman Ben S. Bernanke’s policy of keeping interest rates very low to help stimulate the economy.

The main issue now confronting the Fed is when and how to raise rates and unwind other special programs propping up the economy.

As the country struggled through the worst economic downturn since the 1930s, the Fed lowered its benchmark interest rate to near zero to promote employment, one of its core responsibilities. Now it must decide how long it can keep the low rates in place without neglecting its other main duty as an inflation fighter.

Allan Meltzer, a Fed historian at Carnegie Mellon University, called Yellen “dovish” on inflation and said the Fed was running a risk of triggering a round of sharp price increases.

Yellen “will not do much to change that,” he said.

So just in case you were worried, it doesn’t sound like anyone plans to stop the printing presses any time soon.

Punxatawney Phil saw his shadow, so we’re expecting six more weeks of winter. And Australia failed to hike their interest rates as expected this morning (theirs, incidentally, is at 3.75%), so we expect the US to not start hiking for quite some time. Well, we expected that anyway, but the shadow thing is proof.

[Disclaimer: for the lulz, not for investment advice.]

As Federal Reserve Chairman, Ben Bernanke rakes in a salary of $191, 300, a number which we can only hope includes performance bonuses. He heads up an agency that happens to be the largest bank in the world. It issues currency, is a bank for both the government and for giant commercial banks (acting as a lender of last resort), influences the nation’s – and arguably, the world’s – monetary policy more heavily and directly than any other institution in existence, and pretty much behaves as the axle around which the financial world turns. It’s a lot of responsibility to put on just a handful of individuals, and even more to put on the one person that’s the public face of the central bank. And the sad fact is, most of that happens behind the scenes, involving very advanced magic and incantations in Lovecraftian tongues, so the general public really lacks a grasp on what, exactly, the Fed does every day.

As a result, when news headlines read something along the lines of “Fed Does Nothing” it’s easy to say, hey, what are we paying these people for, and then imagine a meeting of the board of governors resembling a morning after scene in a frathouse, with everyone kind of shambling around in bathrobes after having woken up at one in the afternoon, unwilling to do anything more strenuous than watch Spongebob until someone looks at the clock and reminds everyone else that they’re supposed to decide on overnight lending rates in the next ten minutes and Ben pauses his bong hit long enough to say “Let’s leave it at like, zero, man,” and the other governors make some guttural noises vaguely resembling “Aye,” before passing out on the pee-stained mattress in the corner. Or at least that’s what I imagine.

Anyway, Fed Did Nothing, opting to leave interest rates at next-to-zero, which will help bolster either the economy or Paul Krugman’s blog. The markets rejoiced.

We heard there was a protest outside the ECB yesterday, and we thought: is this related to interest rates? Buying bonds? Against some kind of coordinated action with the BOE?

It was nothing like that – it was a 90-minute strike by staffers, who formed an anti-Trichet drum circle:

European Central Bank workers staged a 90-minute strike today, the first in the bank’s history, to demand a greater say in how pay and pension entitlements are decided.

About 300 staff blew whistles, banged drums and waved placards of ECB President Jean-Claude Trichet saying “Lead By Example?” outside the bank before marching on downtown Frankfurt. “Trichet has failed with his internal policy,” said Adrian Petty, head of the International and European Public Services Organization. “He needs to change his attitude toward the staff.”

Apparently the last visible labor-relations incident outside the offices of their colleagues at the BOE was in 1912, when 150 printers picketed the joint after being dismissed. Of course, that is probably one of the positions that offers massive job security these days.

ECB did meet on interest rates today, and it turns out they are sticking with 1%, instead of heading down to BOE’s 0.5% “ZIRP-esque” levels. And they’re buying up bonds.

“The current rates are appropriate,” Trichet said at a press conference in Frankfurt. “For the remainder of the year economic activity will decline with much less negative rates.”

The 22-member Governing Council has been split over whether to follow the Federal Reserve and Bank of England, which have cut their key rates close to zero and are buying government and corporate bonds to tackle the worst recession in six decades. The debate over how far the ECB should go reached the highest level of European government this week, with German Chancellor Angela Merkel backing the Bundesbank’s view that asset purchases are a step too far.

Bundesbank President Axel Weber argues there is no real risk of deflation and buying assets to flood the economy with money is an unnecessary risk that could sow the seeds of future crises. Officials from smaller nations such as Slovenia’s Marko Kranjec and Cyprus’s Athanasios Orphanides are less certain and have indicated the ECB could buy a broader range of assets to fight the recession.

“Decline with much less negative rates” doesn’t necessarily radiate confidence, but it sounds better than “die in a fire,” which is really all we need these days to start inking bullish stories about economic recovery. I guess “Optimistic enough to stop cutting rates but not optimistic enough to stop injecting liquidity” is too long for a headline, as well.