Analysis: Japan's rising yen might be an early sign of deflation

08/5/2010 | Economist (free content), The · Reuters

Japan's yen is closing in on a historic high against the U.S. dollar, and the currency's strength is difficult to explain, according to The Economist. The relationship between the yen and gold, a classic inflation hedge, might offer a clue. "The recent fall in the gold price in yen terms is hard to spot on a long-term scale," the magazine notes. "But it seems plausible that the yen's strength and the decline in bond yields indicate that the markets are currently edging towards a deflationary view."

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Economist (free content), The · Reuters

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