Japan’s fiscal cliff

With Japan straining to manage its colossal debts, the yen could be heading for a prolonged fall.

Investors are becoming more bearish on the Japanese yen. Last week, market data revealed that for the first time in nearly six months more bets were placed on the yen falling in value than rising. Could this be the beginning of a prolonged fall?

There are plenty of reasons for pessimism. But for a long time, the yen has been seen as a safe haven a least-worst option away from the financial mess plaguing Europe and the US. Four years ago, a dollar would have bought you 97. It now buys around 80.

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