Just when it seemed things couldn't get much worse in Asia, they did. This time the culprit was the Japanese yen, which in mid-June fell to an eight-year low against the dollar. The fear now is that a cheapening yen will trigger another savage round of currency devaluations in the region, which would weaken already fragile economies and send markets reeling once again. And it's not just Asians who are worried. The continent's huge and seemingly unarrestable deflationary tail-spin—recently described by a high World Bank official as "a depression"—threatens to drag American and European markets and economies down with it. This is why on June 17, just over a week before President Clinton was due to leave for a ten-day visit to China, the United States and Japan staged a commando-like early morning raid on the currency markets. The surprise intervention had the desired immediate effect, sending the yen as high as 134 (up more than 8% in just two days) before it began to drift slowly back.
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