The funds had to buy trillions of yen to pay the loans, lifting the currency and easing the pressure on other Asian denominations. This can't be good for Asia or the rest of the world, which wants to sell to Japan. By importing more, a rebounding Japan would be a new engine of global expansion as the U.S. economy slows to a more sustainable pace. By making imports cheaper, endaka forces down domestic prices, cutting business revenues and raising the real cost of repaying debt. He ventures that a good exchange rate for recovery is 140-150 to the greenback.
Most Asian countries import more from Japan than they export.
Hence, the boost in trade revenues from a strong yen could be wiped out by costlier goods from Japan. Over a long period, endaka would trim all those huge current-account surpluses enjoyed by the former Crisis countries. Shrinking surpluses could weaken Asian currencies. So might capital outflows due to increased payments on yen debt and the repatriation of capital by foreign investors. Cliff Tan, an economist with Warburg Dillon Reed in Singapore, notes that the Thai baht is already feeling pressure from Japanese companies in the kingdom sending funds home.