Stocks rise and fall, and bull and bear markets come and go. One asset, though, has stood the test of time for more than 40 years -- yet a recent reversal has some pundits believing that even that long bull market may finally be coming to an end.

That asset is the Japanese yen, which has been rising in value against the U.S. dollar since 1971. But with the island nation having suffered through not one but two lost decades for its stock market, speculation about whether the recent weakness in the yen could be the first sign of a much longer-term plunge for the currency going forward has gotten louder in recent weeks.

How did the yen ever stay strong anyway?
On its surface, Japan seems to have problems that would drive investors away from its currency. During the Greek sovereign debt crisis, it was impossible to ignore that compared to its economic productivity, Japan's government debt dwarfs nearly every other nation on the planet, at more than 200% of GDP. Only Zimbabwe weighs in with a higher debt-to-GDP ratio.

Moreover, Japan has had some of the lowest interest rates in the world for years. Ordinarily, low rates deter investors from having interest in a currency, as higher income available elsewhere entices them to move their capital to more productive currencies. Yet Japan's stability has given it a status as a safe haven during tough times, especially as the dollar's weakness has called its reserve-currency status into question.

Finally heading lower
So far this year, though, the yen has plunged. It fell to an 11-month low recently as strength in the U.S. and relative stability in Europe apparently led investors to abandon the safe-haven currency.

Some analysts are looking at recent announcements from the Bank of Japan as signs of a much more problematic trend. With the BOJ making bond purchases specifically designed to weaken the yen, it appears that Japan is joining the rest of the world in competitive devaluations aimed at boosting the country's export industry.

How to play a weaker yen
Just as U.S. investors are familiar with the phrase "Don't fight the Fed" as a warning not to stand in the way of the central bank's monetary policy trends, so too should investors in Japanese securities stay aware of the implications of the Bank of Japan's actions. In a nutshell, if the BOJ wants a weaker currency, it will almost certainly get it.

That's great news for Japanese stocks, especially businesses that depend heavily on exports. Sony (NYS: SNE) has had trouble with the strong yen for years, as it relies on the U.S. market for sales of many of its products.

In other industries, companies have taken a more active role in trying to manage currency risk. For instance, automakers Toyota (NYS: TM) and Honda (NYS: HMC) face the same challenges of dealing with a strong yen. But by diversifying their production capability through plants in the U.S. and elsewhere in the world, automakers gain currency diversification as well, as their costs come in a wide variety of different foreign currencies rather than solely in yen.

Losers from a falling yen
By contrast, the stocks that have benefited most from competing against Japanese exporters could see recent strength boomerang against them. Ford (NYS: F) and General Motors (NYS: GM) have come a long way from the days when they essentially counted on yen strength as a subsidy allowing them to earn better profits from vehicle sales. But still, anything that makes Toyota and Honda stronger is a potential threat to GM and Ford.

Typically, currency fluctuations tend to even out over long periods of time. The Japanese yen has been a big exception to that rule. But if the long yen bull market is finally over, it would represent a huge change in the way investors look at Japan.

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Tune in every Monday and Wednesday for Dan's columns on retirement, investing, and personal finance. You can follow him on Twitter here.

At the time this article was published Fool contributor Dan Caplinger has a yen for currencies. He doesn't own shares of the companies mentioned in this article. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of General Motors and Ford, as well as creating a synthetic long position in Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy is always strong.

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