Has something changed or is Japan's currency simply taking a breather, having jumped by a third in value versus the dollar and the euro since June last year? Certainly a number of trends could now be weighing on the yen. For a start, the blind rush of Japanese housewives repatriating their savings and local currency investors scrambling to make margin calls has calmed. As the popularity of investing overseas rapidly ebbed, the yen may have appreciated far too quickly.

Second, there is evidence that the Japanese are increasingly selling domestic equities and buying overseas bonds. Net sellers of overseas debt in January, locals bought more than a trillion yen of foreign bonds in the week starting February 15, according to the Ministry of Finance. In addition, foreigners are bailing out of Japanese equities and bonds too, putting further pressure on the yen.

For those that reckon fundamentals are returning to drive currency movements, Japan's economic picture cannot have helped either. Slowdowns rarely look nastier than the 3.8 per cent year-on-year fall in output in the final quarter of 2008. And a collapse in exports has caused a 90 per cent drop in Japan's current account surplus since September – it is now barely positive. Still, Japan's status as an unleveraged nation will underpin the yen. But do not expect a repeat of last year's fireworks.