The yen has rocketed higher against the dollar in recent weeks, touching 17-month highs and having gained 11 percent since the Bank of Japan introduced negative interest rates in January.

As the Abenomics plan to revive the economy is partly predicated on a weak currency spurring exports, this has not gone down well in Tokyo. Chief Cabinet Secretary Yoshihide Suga warned on Monday that the Group of 20 rich nations' agreement to eschew competitive currency devaluations was no bar to Japan intervening to stop "one-sided" moves.

With the International Monetary Fund holding meetings later this week, now would be an embarrassing time for Japan to sell yen on currency markets. But to view this as a short-term problem of financial diplomacy is to underestimate the depth of the problem.

Negative interest rates in Japan have spawned negative unintended consequences. Stocks have fallen 13 percent, with banks, whose very business model is undermined, the hardest hit. That has left many with the belief that the Bank of Japan is constrained: neither negative rates nor its massive purchases of stocks and bonds are having the intended effect.

EUR/USD: during the Asian session the pair traded in the range of $1.1400-15

GBP/USD: during the Asian session the pair traded in the range of $1.4225-45

USD/JPY: during the Asian session the pair rose to Y108.25

Based on Reuters materials