As a former chief economist at the Bank of Japan, I am often asked whether the weak yen is here to stay or whether Japan may one day see a return of endaka (a strong yen).
But as an economist ¡ª not a foreign-exchange forecaster ¡ª the concern lies elsewhere. Periods of yen weakness or strength matter less for where the currency is headed than for what they reveal about deeper policy challenges, both in Japan and in the global economy.
The more pressing question is not what level the yen will reach next month. It is why persistent yen weakness no longer provokes the kind of international alarm that Japanese surpluses once did ¡ª and why that absence of alarm should not breed complacency in Tokyo.
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