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Is the yen losing its safe haven status?

Jeremy Horner | Photographer's Choice | Getty Images

The Japanese yen's safe-haven status may be in jeopardy as rising import costs continue to weigh on the country's export sector and eat into its current account, analysts say.

"As Japan's current account condition continues to deteriorate, the yen's function as a safe-haven harbor may come into question," said Boris Schlossberg, currency analyst at BK Asset Management.

Read MoreThe most important indicator in the world right now: The yen

A nation's currency may obtain 'safe-haven status' if that country has a current account surplus, whereby exports exceed imports. As people abroad pay for these exports in the exporting country's currency, greater demand for that currency leads it to appreciate.

"In order for [the yen's] safe-haven status to disappear essentially Japan would have to lose its current account surplus," David Forrester, senior vice president at Macquarie told CNBC.

Rising import costs

"[The yen] is gradually losing [its safe-haven status] because of its deteriorating trade balance despite the weaker yen," Forrester said.

Japan posted its 21st consecutive monthly trade deficit this week amid a rise in the cost for energy imports following the shutdown of several nuclear plants after the Tohoku tsunami in 2011. Imports rose 18.1 percent on-year in March, while exports rose a mere 1.8 percent.

Read MoreJapan's exports still not getting a weak-yen boost

While the yen's 21 percent depreciation against the U.S. dollar last year due to Abenomics - Prime Minister Shinzo Abe's radical economic reform plan - should spur greater demand for Japanese goods, any resulting demand increase has not been enough to offset rising import costs.

However, any deterioration in the current account surplus due to weak trade data is unlikely to be quick. In February, Japan swung to a current account surplus for the first time in five months as income surplus - the portion of the current account that includes earnings from overseas investments - outweighed the country's trade deficit.

Furthermore, the recent spike in imports was driven in part by last-minute buying before the rise in Japan's sales tax to 8 percent from 5 percent on April 1. This is likely to taper as the sales tax has taken effect.

Still, while the potential for further current account surpluses exists in the near term it won't come easily.

The Bank of Japan downgraded its view on the exports sector following its March policy meeting, noting that exports had leveled off recently amid a slowdown in Asian economies. Previously it had said exports were on a recovery path.

Read MoreMore pain in store for the dollar-yen?

The demographic factor

Demographics could also play a role in the loss of the yen's safe-haven status. Japan has one of the world's most rapidly ageing populations, with around a quarter of is population aged 65 years or older.

Its weak demographics are a huge headwind for future growth prospects, Forrester said, noting that older people are more likely to draw on their overseas savings, which will further weaken the yen.

"Demographic factors will take it [the yen's safe-haven status] away eventually," Forrester said.

"As the population ages and draws on its overseas savings, and the net income surplus gets wound down into a deficit," it will eat away at the current account, he added. "They need to make an orderly [structural] adjustment now rather than a disorderly adjustment later."

Read MoreAll three arrows of Abenomics need an overhaul

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