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Yen hits record-high as stock market continues its downfall

The Japanese currency reached its highest level against the US dollar since the Second World War.

The Japanese yen hit its highest rate against the US dollar since the end of World War Two. The exchange rate reached 76.25 yen against the dollar during American trade times, though it dropped back to to 79.14 by then end of the afternoon in Asia.

A stronger yen is thought to be a threat to the Japanese economy as it could strongly hinder its exporters' competitiveness.

Analysts have so far blamed this shift on the repatriation of assets in foreign currency by Japanese insurance companies. Japan's Finance minister, Yoshihiko Noda, said it was the result of "speculation" and of "nervous" market moves.

The G7 -- a group of the worlds richest nations including Japan, the US, the UK and China -- will meet by Friday morning to discuss the issue. G7 finance ministers could give Tokyo the green light to intervene in currency markets. However, Japan's Economy minister, Kaoru Yosano, discarded that possibility, adding he expected "psychological support" from the G7.

Meanwhile, the Nikkei 225 index lost another 1.4 per cent, amidst fears that a stronger currency would harm exports. The Japanese index has lost 14% of its total points since the earthquake last Friday.

The Bank of Japan injected another 6 trillion yen (£39bn) into the banking system. This is the bank's fourth consecutive intervention, with a total of 34 trillion yen pumped into the financial markets.

Analysts think it may have to intervene in the near future to stop the strengthening of the national currency by selling yens to buy foreign currencies.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.