Back to investments?

Today I was reading a little of Bloomberg's website.
There was an article about currencies.
I don't understand the currency market. I have never traded FX.
I have bought some foreign currencies, but as the yen keeps rising I am actually losing money.
Why does a certain currency go up (or down)?
The dollar has been going down because the US Government keeps running deficits, spending more than it earns in tax revenues. To cover the deficit, the US government sells bonds. If the bonds don't sell, the Federal Reserve buys them by printing money. More money in circulation devalues the dollar.
Is the Japanese government doing the same? I know that Japan's debt is even greater than the US, relative to the GDP. But Japan's bonds are being bought by the Japanese population, not by Japan's Central Bank. The money supply remains stable so the yen doesn't devalue. On the contrary the yens keeps rising.... Why?
A country's debt  keeps rising but its currency also keeps rising? How is that possible?
Why the Japanese yen keeps rising?
Government's debt and currency are usually connected because many times the government will just print money out of thin air to cover the debt, consequently devaluing the currency.
Japan is actually suffering from deflation. I don't really understand why deflation is a bad thing.
Deflation should be a good thing as the prices of services and products fall, becoming more affordable.

As an investor should I be concerned about deflation? Isn't it just an academic issue?
As an investor my question is: what should I invest in?

Is the dollar going up or down? Should I buy dollar?
According to Yahoo finance the dollar is at its lowest in more than 10 years:
http://stocks.finance.yahoo.co.jp/stocks/chart/?code=USDJPY=X&ct=z&t=ay&q=l&l=off&z=n&p=m25&a=

On the other hand, gold has just made another record high.
Maybe I should join the bandwagon and buy gold...
I read a book by Jim Rogers and he is not much bullish about gold.
But as governments all over the world keep devaluing their own currencies, gold seems to be the  de facto money of the world, the only true money around.