The yen’s plunge to a 20-year low threatens to leave it significantly weaker for years to come, shaking up global money flows and undermining Japan’s efforts to get its fragile economy back on track.
The speed of the decline — the yen has slumped 11% against the dollar in seven weeks — has caught policymakers off guard and exposed divisions between a central bank intent on stoking inflation and a government facing a backlash over rising prices.
Currency trading has gone into overdrive while other parts of the financial markets are counting the costs. Companies have slashed sales of yen-denominated bonds they depend on to fund operations, and the returns that Tokyo-listed stocks offer international investors have plunged far into the red in dollar terms.