Yen Weakens to Lowest Level Since 2008 as Nikkei Goes Vertical

The yen sold off by 1.4% today on Fed tapering and is now trading at the lowest level versus the USD since mid-2008. This result produced a near instantaneous vertical ramp in Nikkei futures, which are currently trading up 2.4% off the session lows.





We've conjectured in the past that yen weakness has been a significant driver of falling producer price inflation in the US (since this causes Japan to export its chronic deflation), so another sell off of the yen could pose an even greater deflationary threat.