Meanwhile, Lindsey on Jan. 6 reiterated his support for a strong dollar. A dollar exodus would be bad news during a time when market psychology is shaky. Keeping the dollar strong against the yen is seen as especially critical as the greenback weakens against the euro. But the yen slump does pose risks. If the dollar goes over 145 yen, as it did in 1998, U.S. producers in currency-sensitive heavy industries are sure to protest.
Some Japanese companies fear a backlash.
Honda Motor Co. Executive Vice-President Koichi Amemiya. What's good for Japan may add to the pressure for South Korea and other exporters in Asia. The engineered drop in the yen starting in mid-1995 made Japan's goods very competitive against those of its Asian neighbors, most of which had pegged their currencies to the dollar. Their trade surpluses and reserves evaporated, setting the stage for the 1997 Asian currency crisis. Now, a jump in Japanese exports due to a weak yen will likely hit those economies hard again.