A grim product, declare the authorities, of an ever larger number of people ascending to great heights

without checking the weather

With the UK referendum on Europe looming, something similar is happening in currency markets

Trading floors everywhere are girding themselves

for volatility around the referendum result

especially if the result is for leave

sterling moves could be banked upon to be explosive in that scenario

spreading tumult across the G10 currency basket

But it may ultimately be the yen, and any resulting act of

market intervention by Tokyo to weaken its currency

that detonates the biggest blast

The language of manipulation is already in the air

and traders are dusting off their Ministry of Finance intervention lexicons

on the assumption that a leave vote in the UK

will force Japan to act

The problem is that Japan has inadvertently built up a potentially

massive amplifier for big moves in the yen

at around these current levels

Despite rising claims to the contrary

Abenomics has not been a complete failure

The past 3 years of yen weakness have helped corporate Japan

accumulate an all-time record stash of overseas earning

retained in other currencies

Analysts put the combined hoard at about 50 trillion yen, add that to the 20 trillion yen

of foreign stock investments built by Japanese investors

in the 20 months up to March 31st this year, and you effectively have

an impressively mountainous short yen position

This is where the dangerous weather conditions come in

For the moment, that huge position is not making an equivalently huge impact on markets

The yen has been climbing rapidly against the dollar and sterling

but not so quickly that this has forced Japanese corporates to unwind in a gush

Brexit could change that in the space of a few hours

and the once manageable mountain suddenly becomes very threatening

The yen would surge against sterling, but could move even more

violently higher against the dollar as global Safe Haven trades kick in

A break above 100 yen against the dollar is plausible, say dealers

and could put intolerable pressure on corporate Japan to

repatriate at exactly the point when markets least want yen strength to be exaggerated

Given the close correlation between the yen and the equity market

the Japanese authorities may have little choice

but to intervene and sell the yen for the first time

since the 2011 Tōhoku earthquake