Chillin' out till it needs to be funded
As per our friends at economicshelp.org ( and they are brilliantly lucid, no doubt a great academic career blossoming there) there are three reasons the yen gets to see the wrong side dspite being in the east.
A. Having its own surpluses invested in the US Dollar, it shares a natural inverse relationship with the currency. When it weakens it redeems its US investments into en and hell ensues taking the Yen demandd higher.
Answer: That symptom exactly shows the problem of the starting point and the market maker as the overarching mechanics of a currency flow can dictate only the momentum in any direction – per se, there must be a way to dictate the direction whence the flows will remain flows and not denominate the currency
Answer 2: If they had surpluses they should have run out of them long back, what investments in US treasury would count right now given the yo-yo mechanics of the UST trades and the crisis ridden decade seen by the Yen
B. Interest rates are near zero and cannot be cut to weaken the currency
Answer 1: IF you excuse the muddled metaphors, I could use the story of the demand side shocks to trade the yen at a new value 1/100th of the current yen and no one would bat an eyelid.
Answer 2: Time and deflation wait for no one, they show for sure that YEN assets held in the US would be nearly null in value leaving no reason for the Yen to even trade let alone appreciate
C. The burgeoning debt worth 600 trillion Yen which is still 6 trillion USD after a sizable 1/6th off the value of the yen and is in ratio even ahead of the Obama-economy
Answer: A good reason and we underlined that in the first instance. The market for Yen bonds anyway exists in a sharp contrast to the junk bond preferred even more by hot money and that was led by depreciating currencies for decades.
IN SHORT, we are trading the Yen up because we like to, in fact many DMs lose steam year on year when they engage the stronger currency stronger us paradigm and lose the market to EMs. This year for instance it will be EM currencies and DM markets and growth