The weakness of the yen has become a central focus for financial markets. The yen at one stage weakened through ¥:$ 160, prompting intervention by the Bank of Japan (BOJ). It has been some time since their previous intervention. The yen has weakened steadily and continuously, surprising the market.
Key factor is whether capital flows contributing to the yen's weakness will continue. A weaker yen appears to support higher inflation and stronger growth, as the BOJ aims for improved nominal GDP and debt ratio. Deflation fears replaced by expectations of low inflation. Intervention provides temporary respite, but the current yen weakness is subtle and fair value is uncertain.
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