The Japanese yen is the sweetheart of global speculators. Speculators loath uncertainty but thrive on calculated risk, and the yen offers unparalleled favorable odds for fast-paced global money managers.
Incredible but true, it is with almost 100 percent certainty that any new crisis or sudden bad news in global markets will force a sharp yen appreciation. This was true for the Brexit shock, the recent trade war fears, North Korean missile tests, Japanese earthquakes — you cannot find a global shock that did not result in an immediate surge in the yen. There is no other asset class in the world that offers as much predictability, which is why the yen is loved by speculators around the world.
For Japan, the extraordinarily high sensitivity of its currency to global events is a serious problem. As a de facto lightning rod for global thunderstorms, the yen's rise brings local disaster. In fact, every economic downturn over the past five decades was preceded by the yen's appreciation.