Right now, Japan's currency debasement is being taken in stride. Sure, the Nikkei has been posting a nice performance as the Japanese yen (FXY) does its best impression of the Titanic after years of gains (see chart below), but investors outside Japan don't seem to care much about this.
US Dollar to Japanese Yen Exchange Rate data by YCharts
And it's not just Japan. The United Kingdom has been on the debasement train as well, as indeed the U.S. has done the same through the Fed's endless QE (quantitative easing). At this point, however, the market has decided that the Japanese yen and British pound (FXB) are more vulnerable to these types of moves.
US Dollar to British Pound Exchange Rate data by YCharts
Given the mechanically positive effect from QE on stocks, and the worldwide monetary orgy, the market has mostly ignored any possible negative effects from the currency wars. But the currency wars didn't get such name because they're harmless. There are winners in these wars, as well as losers.
The winners are the exporters in the countries whose currencies devalue. But the losers are the producers and exporters from other countries, which compete against those winners. History tells us that these kinds of wars get people screaming "bloody murder" for a reason, yet the market right now is trading as if there are no losers.
Who might win?
Most probably the winners will be exporters in those countries whose currencies fall the hardest. Right now, that would be British and Japanese exporters. Already some movement can be seen in names such as Toshiba and Panasonic (PC) due to this effect (after a years-long slide).
Who might lose?
Straight away, producers and exporters from Europe must be amongst the most vulnerable. The euro (FXE) is the last currency that's not being debased willy-nilly without any austerity to try and reestablish fiscal balance. This has led the euro to recently gain value versus the USD, JPY and GBP.
Within Europe, the German economy has been traditionally a large and strong exporter. However, if it faces debasement by every other country even that strength might come up short. Japan was a strong exporter as well, and between demographic woes and the past strength of the yen, it too stumbled. This means that the German stock market, for which the iShares MSCI Germany Index Fund (EWG) is a proxy, might end up being hit by this trend. The trend might also hit specific German exporters, such as Siemens (SI).
The negative effects might also extend to U.S. exporters, if in the race to the bottom, the USD manages to devalue slower than either the JPY or GBP. However, while such is happening right now, it's hard to tell whether such will be the case down the road, given that the policies are similar between the USD, JPY and GBP.
The currency wars aren't harmless. There will be winners who will take share in the world markets, and there will be losers who'll lose share. The winners will mainly be exporters in the countries devaluing faster, and the losers will be exporters in the counties whose currencies hold value better.
At this point, it seems likely that some of the losers will be in the exporting sector in Europe, while the winners will be exporters from Japan or the United Kingdom.