Japan yen hits new US dollar high

The Japanese yen has hit its highest level against the US dollar since the Second World War, as investors bet that insurance companies will be forced to repatriate their assets and foreign currency.

This is precisely what happened following the Kobe earthquake in 1995.

The stronger yen will impact Japanese exporters, both by making their products more expensive overseas, and by reducing the value of their overseas revenue when it is converted back into yen.

However, just as with Kobe, analysts expect the yen to weaken in the coming months.