THE LONG SLIDE of the Japanese yen continues. The Japanese government apparently does not fully comprehend the enormous strains that the falling yen is putting on the world trading system. At any rate, Japan isn't doing anything about it. Perhaps that's because it is in the midst of a protracted political crisis, in which a premier has decided to depart and the ruling Liberal Democratic Party cannot decide on a successor. Economic policy lies at the center of the quarrel, and the various factions don't seem to be making any very rapid progress toward a resolution.
The current slide started nearly a year ago. One way to describe its magnitude is to observe that the change in the currency exchange rate alone since last November lowers the price of a $6,000 car to $4,650. Whatever the American automobile manufacturers have accomplished over the past year to compete more successfully with the Japanese imports, their progress is being swamped by the fall in the currency alone.
Here in this country, the further competitive advantages conferred on Japanese imports by the exchange rates is only generating still greater strength for protectionism. Anyone can see the trend, as a more or less reluctant Reagan administration caves in to these pressures and constructs new arrays of trade quotas to hide behind. The expansion of trade has been one of the great forces for economic growth over the past generation, and limiting that trade now will, unfortunately, limit future growth.
The reasons for the falling yen are innocent, in the sense that the market is not being deliberately rigged. Japan lifted currency controls, setting off a surge of Japanese investment abroad. Here in Washington, the secretary of the Treasury, Donald T. Regan, said last week that the United States will not intervene. He's half right. The responsibility to take the initiative lies with Japan. Its current passivity is another example of the Japanese habit of taking very little responsibility for the health and maintenance of a worldwide structure of trade of which it, along with the United States, is a major beneficiary. But if Japan begins to move to stabilize the yen, the United States has an obligation to lend a hand. Perhaps that offends Mr. Regan's free- marketeering principles. But how does he feel about the lengthening list of quotas on imports?