“Why would the Yen be so popular when the country is in shambles and about to go radioactive for 1,000 years?”
This is what happened here in 2008. People needed to raise cash to meet margin calls when Lehman fell.
In this case, the Japanese need cash to fix their country. So, they are bring their money home. When you have a whole country doing that, it increases the value of that currency, even if in the near future the GDP will be falling. They are selling off whatever they can to raise their personal cash levels.
It is very deflationary, and similar in the panic for cash that we experienced in 2008.
So all the Japanese keep their savings in dollars and Euro? Why? Why not keep your money in Yen? It is a strong currency? This theory is crazy. The Japanese have a huge savings rate and they have plenty of money at home. I think the Yen is under attack by those who want Japan to crumble.