Japan is growing nervous as the dollar slides rapidly toward a new post-war low against the yen. Government and business leaders appear to be wondering whether the international good-will a cheap dollar is supposed to bring is worth the turmoil it is creating for its export industries.
The dollar was trading for about 240 yen in September, before a concerted attack on it by monetary authorities of the major industrialized countries began. The Japanese felt confident as the dollar fell to 220, then 200. Brows have been furrowing in recent days as it dipped into the high 170s.
However, the dollar closed at 183.35 yen overnight in Tokyo yesterday, up sharply from Thursday's close of 179.85.
Traders said Thursday's and today's rebounds were helped by statements from U.S. Federal Reserve Board Chairman Paul A. Volcker that the dollar had "fallen enough."
There was no clear sign, however, that a general rally had begun, and chances remain good that the dollar will reach and break the post-war record of Oct. 31, 1978, when it was worth only 175.50 yen.
In an economy built on predictability, Japanese corporate leaders are especially concerned with the speed of the decline.
Given two or three years to cope with such a change, they argue, Japan could manage nicely. But this rate is turning their planning upside down.
"Japanese industries and the Japanese economy as a whole cannot adapt, because the pace has been too fast," complained Yoshihiro Inayama, chairman of the Japan Federation of Economic Organizations, which represents large banks and corporations. "Various frictions have been caused."
He said he foresees the dollar settling at the 180 level.
His counterpart at the Japan Chamber of Commerce, Noboru Goto, also cited "serious impact" on his members, which tend to be small- and medium-sized enterprises. He called for a new world monetary system and government aid.
Satoshi Sumita, governor of the Bank of Japan, the country's central bank, also has expressed concern.
Last week, he was quoted as calling the rise of the yen "excessive" and saying that preventing a crash of the dollar is the joint responsibility of the United States and its trading partners.
Plans for exchange-rate management are held closer to the chest here than military deployments. But public statements by Japanese leaders and Japanese newspaper reports have fueled speculation here that plans are afoot to drive the dollar back up a bit or at least arrest its fall.
On Tuesday, Finance Minister Noboru Takeshita remarked that the dollar's fall had begun dealing blows to many regions of the country, especially those dependent on exports, and stressed the need for government action.
Economic Planning Agency Director General Wataru Hiraizumi was quoted as saying that the dollar's recent fall was too rapid and due mainly to speculation. Still, to date, nothing firm has emerged showing the government will respond.
A cheap dollar tends to make goods produced here more expensive to foreign buyers and to decrease Japanese exports. At the same time, foreign goods become less expensive to Japanese buyers, which is supposed to lead to increased imports.
Despite the blow it would cause to its export industries, Japan agreed in September to join with the United States, Britain, France and West Germany -- which, with Japan, make up the so-called Group of Five -- to drive down the dollar's value through market intervention and other techniques.
The step was seen here as vital to preserving the international trading system on which Japan's prosperity is built.
The huge surpluses that the high dollar was fostering with Japan's trading partners -- about $50 billion with the United States alone in 1985 -- was causing protectionist barriers to go up.
"We are ready to accept the fact that the strong yen will affect our exports as a whole," said Kyoji Kitamura, a deputy vice minister at the Ministry of Finance.
"As a general trend, we have chosen the strong yen," he said. "It is good for the economy and necesssary."
The Japanese government is already giving financial relief, through tax breaks and subsidized lending, to small- and medium-scale export companies, which have been especially hard-hit. More than $1.5 billion in low-interest loans will go out during the next two years. "The purpose is not to help export competitiveness," said Hideki Osada, a Ministry of International Trade and Industry official involved in the program. "It is just to prevent bankruptcies."
But, so far, auto and electronics manufacturers and other big-scale enterprises that account for the bulk of Japan's exports are being left to fend for themselves. While they are not now in serious financial trouble, they are wondering about the future.
Forward currency contracts that allowed many big Japanese companies ride out the first months of the cheap dollar in relative comfort have now almost all run out.
Japanese executives are searching out ways to cut costs and are deciding whether to raise prices or take the exchange loss out of their earnings.
Matsushita Electric Industrial Co., which sells in the United States under the Panasonic, National and Technics brands, already has raised wholesale prices in the United States by 5 percent to 10 percent. The firm's president, Akio Tanii, said recently it is considering another rise.
Toshiba Corp., another electronics maker, is facing falling profits in the second half of the year and looking for ways to save.
"Are there any other materials which are of equal quality, but cheaper, that could replace present ones?" asked Yuji Wakayama, a spokesman for Toshiba. "Cannot we use 1 millimeter steel plates instead of 2 millimeter?"
Nissan Motor Co., Japan's second-largest auto producer, has seen much of its cost advantage over U.S. producers evaporate in the last six months.
"The situation is very severe, but we are not thinking at all of getting government help," a company spokesman said. "Self-help is still our basic principle."
Increase in demand in the home market, meanwhile, does not hold out much hope for relief.
Though the government has adopted a heat-up in the domestic economy as a long-term goal, with hopes of increasing imports and decreasing exports, it has refused to prime the pump with increased government spending.
Some members of the ruling Liberal Democratic Party, always sensitive to constituents' pressure, are said to fear the dollar has become too strong and want intervention.
But intervention by Japan alone is not seen as effective. Help from the United States and the other partners would be needed, by this account, and it is unclear whether it would be forthcoming.