The yen first arrived at its slide to the abyss on April 28th and consistently since has only gotten worse: it remained at only 115 to the dollar toward the beginning of this current year. Japanese policymakers have begun to fret, leading markets to speculate about whether they will intervene to halt the fall. That would probably prove futile: deep forces are driving the yen’s depreciation.
Policymakers have customarily seen a frail yen as a positive for Japan and its strong commodity-centered businesses. "The flip side," a banker of Goldman Sachs says, Is that they can't reap as many benefits from depreciation." The yen could keep falling, maybe to 150 to the dollar, a level unseen, even during the Asian financial crisis of 1997-98.
By: Noah Hittie
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