The yen's recent falls against the dollar haven't taken it anywhere near the historic lows of recent years, but a broad currency index tied to trade competitiveness suggests the Japanese currency has already declined to a level not seen in decades, possibly lending weight to the view that excessive yen strength is nearly over.

The yen's effective exchange rate--a weighted average of the yen's exchange rate against the currencies of its trading partners--released last week by the Bank for International Settlements, has already crossed the level of 2007, when the dollar advanced to ¥124 and concerns arose a about a "weak yen bubble."