This mood contrasts sharply with the active policy tightening moves in the USA in many other developed countries and is a fundamental reason for using the yen as a funding currency.
If the Bank of Japan manages to conduct a controlled landing of the yen at another, fundamentally lower level, it would restore competitiveness to Japanese exports and provide a driver to turn on the industrial engine, which has often stalled in recent years.
In the meantime, investors and traders should be prepared for a permanent yen decline over this year or the first half of the next one if we now see Europe and the US abandoning their zero-interest-rate policy, as policymakers there hinted recently.
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