Because currency traders (who are largely speculative) are panicking. They're moving money around in a frenzy.Originally Posted by Gutsman Heavy
See above.
It's all driven by fear, not reason. The Yen is seen as safe, so lots of currency traders are moving into the Yen, away from currencies such as AUD & CAD. They're acting like sheep too in that as the flow of money starts and the rate starts to move, more and more rush to cut their losses.
The irony is that a high Yen is _bad_ for an export driven economy like Japan, which is _still_ trying to drag itself out of a long period of stagnation. Japan doesn't do a whole lot of importing, so a high Yen isn't really that useful to Japan.
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