I believe an inflationary policy via a weak yen would be the best prescription for a quick economic recovery.
A weak yen and resulting increase in import prices would keep the economy from sliding into a deflationary spiral.
In September 1985, the top financial officials of the world met at New York's Plaza Hotel to coordinate a depreciation of the dollar. The Plaza Accord helped pull the United States out of a recession.
Japanese economists and mass media maintain that a weak yen policy would not be welcomed by the U.S.
It may be true that the dollar is too strong against the euro, but not strong against the yen. The dollar stood at 240 yen at the time of the Plaza Accord and around 140 yen even at the peak of Japan's late-1980s bubble economy, far stronger than it is now.
Japanese mass media fear that a weak yen would lead to devaluation of other Asian currencies.
The U.S. Federal Reserve and the Bank of Japan intervened in the currency market about three years ago in a concerted effort to keep the dollar from rising above 147 yen. China then criticized the move out of fear that a weak yen would adversely affect its currency.
With the Chinese economy now growing at an annual rate of 7.5 percent, however, there is speculation that the Chinese currency will be revalued ahead of the 2008 Summer Olympics in Beijing.