The Eurozone crisis is putting upward pressure on the yen, with traders continuing to view it as a safe haven currency. Strong yen is making it increasingly difficult for Japan to compete in the global markets against nations like Germany who has a weak currency advantage. Even for something like autos manufactured in the US, there is still a component of parts that is brought from Japan.
Japan had a trade deficit in 2011, which is unheard of for that country in recent years. Some of that was clearly driven by the tsunami disaster. There is no question however that a strong yen was a contributor.
|Japam trade balance (Bloomberg)|
Japan would likely want the US and the Eurozone to help them put in place a coordinated move. But neither of their two biggest trading partners has much of an incentive to do so. Nevertheless BOJ may go it alone and find a quiet day to try to punish everyone who has on a speculative long JPY position.