I have a very simple question which someone may be able to help with.Everything I've read seems to suggest that a weakening currency tends to yield inflation (amongst other things). I can even justify this to myself as if the price of your imported goods increases, through your currency being weaker, then you would expect the price of your domestic goods to also rise. However when I think about developed countries over the past say 7 years I notice the opposite. For example Japan iseems to have suffered deflation and a weakening Yen as opposed to Australia which has had a higher level of inflation and up until relatively recently a strengthening dollar.Would anyone care to shed some light on this apparently anomaly?

Weakening currency -> inflation is a ceteris paribus argument. But ceteris is never paribus. Perhaps deflation in Japan would have been much much worse if the currency had not weakened (due to economic stagnation). Perhaps inflation in Australia would have been especially severe if there dollar had not appreciated. In both countries much stronger economic phenomena were at work that dominated the rate of deflation/inflation.

A weakening currency is inflation, depending on how you define inflation. So the question is does inflation cause inflation, or does an increase in the price of one good cause, or tend to occur at the same time as, an increase in the price of another good. It is not too hard to increase the quantity of a currency, decrease the supply of a specific good or basket of goods, and have the price of those goods drop, priced in the currency. If the currency is owned by people who do not demand those goods.When the yuan was pegged to the dollar, the yuan-dollar saw higher inflation in the Chinese goods consumed in China, and lower inflation in the Chinese goods consumed in the USA. So there is not a really strong reason that the price of foreign goods, or foreign currencies, priced in your currency, will move in the same direction as local CPI goods. Even if part of the price move is a change in the supply of your currency, or a change in who holds or spends the supply.

When I lived in South Beach, the most crowded days at bars along the beach were rainy days. The beach would be empty and the bars would be full, from people leaving the beach when it rained. But not all rainy days were equally crowded. If it started out sunny, then rained, the beach would first fill up, then the beach would empty and the bars would fill up. When it rained really hard, the tables out on the patio would empty, and the bars indoors would get really mobbed.So people may suddenly stop investing and consuming, and just want to get out. Then the prices will be low, but the exits will be crowded. Especially if there were a lot of people to start.