The recent sideways trading in the yen and the Nikkei may simply be a pause in the trends, which would not be unusual following such rapid moves. Nonetheless, we do have three more fundamental concerns. The first is that any further decline in the yen will run into diminishing returns and could actually be counter-productive for the economic recovery. Secondly, some of the more radical proposals for monetary expansion already appear to have fallen by the wayside. Thirdly, the global backdrop may be about to turn less favourable.
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