THE RECENT devastating earthquake in Japan with such a magnitude was extremely rare event
in the natural world. In the world of financial markets, something extremely rare and worth our attention
also happened last week. After the natural catastrophe and unfolding nuclear crisis, the Yen surged to
approximately 76.25 Yen per US dollar, a record high since the World War II, breaking the psychological
level of approximately 80 Yen per US dollar since the Kobe incidence in 1995. The underlying reason
behind the appreciation of the Yen was the expected inflows of repatriated funds and unwinding of the
Yen carry trade.