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IMF: Yen "Moderately Overvalued"

The International Monetary Fund believes that, from a medium-term perspective, the Japanese yen is moderately overvalued partly due to "inflows of capital seeking a safe haven." Indeed, the yen has been extremely strong due to continued investor uncertainty and wariness about such factors as the European crisis, disappointing economic data in the U.S. and fears of a potential China slowdown.

The IMF also supports the Bank of Japan's policy of monetary easing and actually supports additional easing to achieve the goal of 1 percent inflation by 2014.