Nouriel Roubini, professor of economics at New York University famous for predicting 2008 global crisis, notes that yen’s surge was caused by the risk aversion that strengthened due to the quake in Japan. In his view, the appreciation of Japanese currency won’t last long as the disaster affected the nation’s economy.

Roubini expects that the massive reconstruction will worsen Japan’s fiscal state. The Bank of Japan will have to increase the volumes of the long-term bonds’ purchases monetizing additional fiscal deficit.

The economists underlined that domestic demand in the country is low and Japan has to increase its net exports. To do this Japanese authorities will need weaker rate of the national currency. As a result, the fundamentals speak for the weakness in yen’s rate. Yen will strengthen only if the external balance improves.