The yen¡¯s status as a haven in times of global stress faces growing skepticism, threatening to exacerbate a selloff that sent the currency to an eight-month low this week.
For decades, investors have turned to the yen during market shocks, from financial crises to geopolitical blowups. The logic was simple: Japan¡¯s huge current-account surplus, stable political system and deep domestic investor base made it a reliable refuge when risk assets tumbled.
But that instinct is now under strain, undermined by the Japanese currency¡¯s increasingly inconsistent behavior as a hedge and a move toward gold as part of a trade that shuns major currencies. The yen broke above the key level of ?150 against the dollar this week following hard-line conservative Sanae Takaichi¡¯s surprise victory in Japan¡¯s ruling party leadership race.
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