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The high yen dilemma

THE DOLLAR dipped to an all-time low of below 98 yen in Tokyo on Friday. Six months ago it bought 113 yen. Is this the end of Japan's manufacturing industry, as some of the more excitable business leaders are now claiming in Tokyo? Or could it be yet another external shock - like the oil crises of the 1970s or the previous rise of the yen after the 1985 Plaza Accord - which will turn out, in the end, to have had beneficial effects on Japan's economy?

As usual, all is not as it seems in Tokyo. On 22 June, the day after the dollar first fell below the 100-yen level, the government held an emergency cabinet meeting. The newspapers had screaming headlines on the yen's precipitous rise. Takeshi ...

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