The beleaguered yen has scope to slump further, with a drop of close to another fifth not out of the question, according to some strategists.
Societe Generale SA strategist Albert Edwards reckons the unraveling of Japan’s currency has the potential to take it to around ¥150 "as traders get the bit between their teeth.” That’s a level unseen since the last century, some 18% below the ¥122.42 per dollar the yen reached at one point on Friday.
"When the yen breaks, it moves sharply,” he wrote in a note to clients. "Despite being incredibly undervalued and oversold, the yen could yet plunge from here as FX traders, stupefied into boredom by the lack of FX volatility in recent years, see the yen’s decline as a trading opportunity and climb aboard.”