After falling by almost a fifth since Japanese Prime Minister Shinzo Abe came to power just over a year ago, the yen is in a sweet spot for the economy.
Companies have roared back with bumper profits as the currency's slide to five-year lows made exports more competitive and while import prices, notably for fuel, have climbed, importers are benefiting too.
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But should the yen keep falling, the drawbacks of higher import prices and possible anger from Washington and other trading powers could start to outweigh the benefits of a weaker currency. Those benefits start shifting to drawbacks if the yen slips to 120-130 per dollar from its current Goldilocks' range of 100-110.
The yen may weaken further as the U.S. Federal Reserve slowly tightens its dollar-liquidity spigot while expectations grow that the Bank of Japan will increase its own flood of money into the economy to offset a sales-tax increase in just over two months, say Japanese executives, policymakers and investors.