The ongoing yen strength could continue to weigh on Japanese equities. For instance, electronic parts maker Murata Manufacturing Co. lost 13% following its projects for a dip in earnings in the fiscal year, citing a stronger currency, lower product selling prices, increased fixed costs and higher R&D expenses.

More international investors have piled in to the relatively attractive yields in U.S. government debt as foreign central bank policies have pushed international government yields to near zero or negative in some cases like Japan. However, that scenario merely serves to underscore the intensity with which investors are flocking to the yen as a safe-haven play.

Related: Are Dollar ETFs Ready to Rally?

“After several years of QE worldwide, the general consensus is that easing tends to depress the value of a country’s currency. Mark Matthews, the head of Asia research for the Swiss private banking firm, Julius Baer Group Ltd. (VTX: BAER), stated in an April 2016 interview that more QE is one of the BOJ’s few remaining options to stimulate an economy still showing poor growth and falling well short of the BOJ’s 2% inflation target,” reports Investopedia.

For more information on the yen currency, visit our Japanese yen category.

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