Yen Undervaluation Causing Increasing Distortions
The weak yen will depress local purchasing power in Japan, while boosting net exports, As a result, Japan's trade- and current account surplus have continued to rise. Note however, that contrary to the misleading "unit labor cost" economics of The Economist, the weak yen have not boosted overall economic growth, just shifted it from domestic demand to net exports. As this shift is very unnatural, it will in fact create economic distortions both in Japan and elsewhere.
Meanwhile, European leaders are starting to complain, noting that Japan's monetary policy creates as much distortions as China's. An increasing number of investors -both Japanese and gaijins- are borrowing at the super-low nominal interest rates in Japan and using it to invest in far higher yielding investments elsewhere.