A striking US dollar rally against the yen, which catapulted the greenback to new seven-year highs against the Japanese currency, has led to a half-hearted verbal intervention in Tokyo. But a reversal is unlikely in the immediate future, analysts say.
A week ago the yen was trading at 115.6 to the greenback but on Thursday night reached a seven-year low of 118.8.
But Australians should not get too excited about trips to Tokyo becoming cheaper because the Aussie dollar has flatlined over the past few days, sticking closely to a range centred around 101 yen.
The greenback was on Friday afternoon trading around 117.5 after some jawboning from the Japanese Finance Minister Taro Aso, who on Friday said the yen had weakened too fast.
"The yen's depreciation against the dollar over the past week has been too rapid. A rapid swing in currencies, whether up or down, should not be welcome as it causes various impacts," Mr Aso said.
But he dismissed the need to intervene in the market.
"Currencies should be determined by the market, not by intervention," he said.
ANZ currency analyst Daniel Bean agreed the recent slide in the currency had been very fast.
"The weakening has been very sharp and a bit sharper than our expectations but over the last 24 hours or so it looks like we're starting to see a bit of stabilisation," said ANZ currency analyst Daniel Bean. Stabilisation "is probably what we're going to see over the rest of the year," he said.
The monetary easing by the Bank of Japan, the uncertainty over the progress of Abenomics, the recently announced snap election and the negative GDP figures have all had their effect on the yen, said Mr Bean.
However, he said that despite Japan's economic woes, there would probably not be any further monetary easing. This would further stabilise the yen-dollar value.
"The issue at the moment is that the easing hasn't really transferred itself through to the real economy. We haven't seen a real inflationary pulse except that generated by the currency, we haven't seen real evidence of wages rising, we haven't seen consumer demand rising, and we haven't seen money growth rising at the same rate as the money base.
"It's a question of what else they can do to revive growth rather than whether they need more monetary easing."
