The Japanese Yen money is critical for international capital flows
When it comes to the international currency and stock markets the Yen is of critical importance. Widely perceived as a benchmark of risk, when the market determines that it is safe to trade and invest, traders and investors borrow in Yen at a low interest rate to purchase foreign securities or higher yielding currencies. The Japanese Yen money moves against various crosses depending on risk and international capital flows. If stock markets experience a sharp correction you often get wide movements in the currencies as the carry trade unwinds and traders and investors reduce their core holdings or retreat to safer alternatives.
