The trade is familiar to investors worldwide: in times of turmoil, rush for cover by buying the Japanese yen.
This year a global trade row has erupted, Donald Trump has lamented the dollar’s strength – ignoring a custom that U.S. presidents avoid openly interfering in financial markets – and the Chinese yuan has tumbled.
And yet the yen has stayed resolutely weak, becoming the weakest of the G10 developed market currencies this month.
The yen’s safe-haven status is not in doubt, underpinned by Japan’s nearly two trillion yen ($18 billion) monthly trade surplus. But without a massive world market shock to discourage Japanese investors from buying foreign assets, the yen is likely to stay weak – above all because the Bank of Japan lags behind its central bank peers in ending monetary stimulus.