This week witnessed a significant currency market shift: the Japanese yen plunged to an all-time low versus the offshore yuan. The move isn't just a number on screens—it's sparking real worries about inflationary pressures creeping into Japan through imports.

What's driving this? Japan's central bank continues its cautiously slow approach to policy normalization. While other major economies tightened aggressively, Japan's gradual pace leaves the yen vulnerable. Cheaper yen means pricier imports, from energy to consumer goods. For an import-dependent economy, that's a recipe for inflation nobody ordered.

The timing matters. As global markets watch every central bank move, Japan's delicate balancing act between supporting growth and managing currency weakness grows trickier by the day.