Yen On The Rise

NY - The yen is rising due to the USD's stark decline since economic data began to weaken in June.  The dollar last fell due to Federal Reserve officials considering a round of asset purchases to combat the lack of spending of penniless states.  This has left investors unsure of the U.S. economy's recovery and, consequently, the 10-year Treasury note yields just 3%, still a major increase over the 2-year note that now yields it's lowest percentage ever, just 0.5%. 

The U.S. rate plunge has led to more talk about a dollar based carry trade, a type of trading in which investors borrow low-yielding currencies and sell them in order to invest the profits in high-yielding assets.  This, in turn, makes the dollar seem wildly unwise to invest in and the yen a sure bet.

The yen has not seen such a rise since the mid-1990s, causing pressure on the country's export sector.  This might lead to an intervention by the Bank of Japan.

Japan is the second largest holder of the USD, after only China.  This has not been a profitable holding for the country, and might have led to up to a 3.5% decline in Jpana's economic output.