The Battle Over the Yen

The foreign-exchange market for the Japanese yen is working fine, the International Monetary Fund declared last weekend. No it’s not, Japan’s finance ministry shot back on Thursday in what’s become an instructive tussle over exchange rates and monetary policy.

A major economic story of the past two years is the chronic weakness of the yen relative to the dollar. Traders appear to be preparing for a push down to ¥151 per dollar, a 33-year low, now that the market has grown more comfortable with ¥150—which also was a 33-year low when the currency hit that level a year ago.