The yen fell to its lowest level against the dollar in more than six months in February, with the exchange rate rising above 80. The principal catalysts for the weakening of the currency were probably investors’ growing appetite for risk, an apparent increased willingness on the part of the Bank of Japan to embrace quantitative easing, and Japan’s worsening trade position. The drop in the yen provided a welcome boost to Japan’s stock market, which outperformed its US counterpart.
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