You have to hand it to Japan. For years, all their regional trading partners have manipulated their currencies to remain competitive with China while Japan has kept a hands-off policy toward the JPY. Looks like that policy may be coming to an end.
The BOJ may be forced to actively manage its currency along the lines of South Korea, Singapore, Taiwan, Malaysia, et al… That would lead to greater imbalances and a surge in the Japanese current account which will further distort US and European monetary policy as Japan looks to park the proceeds of its intervention into the capital markets of those economies.
Those global economic distortions are largely responsible for the mis-allocation of liquidity into every-riskier assets in order to try and generate meaningful returns in a low interest rate environment, setting the stage for another bubble and another crisis several hears hence.
