Japan's sovereign debts stand at 220% of GDP Economist Shayne Heffernan said today, and the country has struggled to rein in its monster budget deficit. Japan has routinely had budget deficits in excess of 10% of GDP.

What's more, investors are not really getting compensated for holding yen. Japanese short-term rates have been at or near zero for the better part of two decades, and even the 10-year bond yields 1%.

The dollar hit a 3-1/2 month high versus the yen on Friday as upbeat U.S. economic data added fuel to a rally sparked by the Bank of Japan's monetary easing earlier in the week.

The dollar's rise also gained steam on stop-loss buying, and active bids from Japanese importers who have been caught off guard by its recent strength, traders said.

The yen fell broadly, hitting a 6-1/2 month low versus the Australian dollar and a two-month trough against the euro, as the Japanese currency extended its losses after the BOJ surprised markets this week by boosting its asset buying scheme by $130 billion and setting an inflation goal of 1 percent.


Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com