Some of their loans at home started to default. Japanese banks found themselves on shaky ground. The only alternative was to cut off some of the money going to their foreign brothers. The fuel for further Asian growth was gone. It was like a domino effect.
Currency risk exists even without recessions overseas, though.
Anytime you invest in an overseas stock, you have to exchange dollars into another currency. To get your money out, you have to change back into dollars. How much of that other money your dollar will buy and vice versa depends on the changing currency markets. They say that now is a good time to take a trip to Indonesia. American dollars are worth much more there now, making travel cheap.