USD/JPY — The yen, having tested and probed the key 80 figure, is giving us a gift. Japan’s economy remains in need of stimulus. There is fear in Japan of the recession resuming. A recent coincident index that is a composite of more than 11 indicators declined to the lowest level since 2009 (excluding the outlier earthquake month of 2011). The indicator was so bad that Japan’s Economic Minister Seji Maehara is reported to have urged ignoring it. Add to this the fact that the Bank of Japan is in an easing modality as it continues to expand its asset-purchasing program. A catalyst for a weaker yen will be perceptions that the Eurozone sovereign debt problem is manageable. The level of capital flowing to the yen as a safe-haven basket as a result likely will decline, lessening demand. Given the current state of the Japanese economy, traders should realize that the era of yen strengthening as a safe haven for global fears will be over in 2013. Further weakening to 85 is a target for 2013 (see “No more carryen”).