Investors riding out storms on the market have long docked their money in the Japanese yen. However, they have seen the currency sink to levels not seen since 1998 -- around 145 against the US dollar. Some are wondering whether they can still count on the yen to hold its value as a safe haven.
Investors have been rattled by the war in Ukraine, volatile markets, and rising prices for goods.
However, inflation in Japan has hovered around 2.5 percent, and policymakers at the Bank of Japan have kept interest rates low. Their counterparts in the US, meantime, have hiked rates this year several times. Investors have been attracted to the higher returns they can get on the dollar.
Central bankers elsewhere have not moved as aggressively, but they are still moving. On Wednesday, policymakers at the Bank of Canada raised their key rate to 3.25 percent.
Members of the European Central Bank will meet on Thursday to decide on a hike of their own.
Policymakers in Japan have tracked this upward shift. They have not signaled any hikes to come. But the more the yen slides, the more pressure they will be under to act.