A Weak Dollar Strengthens Japan

FOR A DECADE NOW one U.S. administration after another—Reagan, Bush, Clinton—has talked down the exchange value of the dollar against the yen. Every time the dollar declines—and it tumbled during these ten years from 250 yen to below 100 yen—we are told by the experts that “this time” the trade deficit with Japan will surely go away. And every time the dollar declines, the Japanese howl that endaka—the high yen—will destroy their industries and drive them into bankruptcy.

U.S. manufacturing exports to Japan have indeed nearly doubled in the past ten years. But they have increased even faster in ...

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