The yen has fallen to its lowest level against the dollar in more than six months, with the exchange rate now just a whisker below 80. The principal catalysts for the weakening of the currency have been a shift in the relative prospects for unconventional monetary policy and economic growth in the US and Japan, investors’ increased appetite for risk and Japan’s worsening trade position. We still forecast the yen to rebound against the dollar as the euro-zone breaks apart this year, but not as far as we had previously projected.