A quarter of Japan’s population is more than 65 years old – three times the world average. Tax revenues have been falling since 1990. Meanwhile, total government expenditures, according to the Ministry of Finance, have leapt by $300bn or so since the financial crisis, helping gross private and public sector debt to an equivalent of five times gross domestic product. Surely, a recipe for rising bond yields and a bombed-out yen, right?

Wrong. Japan’s currency has been one of the strongest this year, up about 6 per cent against the dollar, twice that versus the pound and almost a fifth higher in euros. Nominal government bond yields are where they have always been: close to zero.

Many have been caught off-guard by the flying yen, not least because Japan’s economy looks as sick as others causing fright. In addition, there has long been a close link between Japan’s balance of trade and the yen/dollar rate. When the balance deteriorates, so does the currency. But since the financial crisis a reduced balance has been ignored by the yen, now trading at 87 to the dollar. History suggests that it should be closer to 130.