Fallout from the coronavirus outbreak may finally lift the curse of the safe-haven yen for Japan, but policymakers fear fiscal laxity could lead to a freefall for the currency eventually, undermining efforts to cushion the economy from the pandemic.
The yen, which investors typically snap up as a safe haven in times of financial market stress, fell nearly 10 percent against the dollar this month as pandemic fears spurred a stampede into the refuge of the world's most powerful currency.
For policymakers who have repeatedly fought in recent decades to tamp down the currency because its strength hurts the country's export-reliant economy, that move could be problematic against the backdrop of huge fiscal stimulus.