If policymakers in the eurozone and Japan hoped to engineer a weaker currency by their aggressive expansion of monetary policy, they must be watching the latest moves in currency markets with dismay. Despite fresh rounds of quantitative easing and radical experiments with negative interest rates — usually associated with a weaker exchange rate — the euro and yen have rallied. Threats of official intervention from Tokyo did nothing to prevent the yen climbing last week to a 17-month high against the dollar.

Interpreting the vagaries of foreign exchange markets is a risky business. One popular conclusion, though, has been that these moves betray the helplessness of central banks, for whom a weak currency would be an invaluable tool. Investors think the European Central Bank and Bank of Japan are nearing the limits of monetary policy and no longer believe they will be able to revive growth and fight off deflation.

There is some truth in these fears. The yen’s current level is hardly a ringing endorsement of Abenomics. Nonetheless, the perverse behaviour of foreign exchange markets does not necessarily reflect despair over the state of the global economy. Yen and euro strength is at least in part a consequence of the recent change in stance by the US Federal Reserve, which has signalled that it is in no hurry to proceed with a second rise in interest rates.