What To Do About the Yo-Yo Yen?

Previous chapters have given an account of the people and forces which have pulled the strings of the yo–yo yen. The relative importance of people as against forces is of course a perennial issue in historical analysis – whether in the arena of international relations (would the First World War have taken place if Archduke Ferdinand had not made his provocative visit to Sarajevo?) or of monetary affairs (would the Great Inflation of the 1970s have occurred if Arthur Burns had not secured his appointment as Federal Reserve Chairman by ‘indicating’ to President Nixon that he would end the tight money policy then in force and concentrate on reviving the economy in time for the upcoming elections?). In the case of Japan’s Lost Decade of the 1990s, one ‘people question’ is whether the economy would have been more prosperous if someone less attached than Yasushi Mieno or Masaru Hayami to a strong yen for its own sake, less zealous about wrenching independence from government, and more understanding of the surplus savings ‘problem’, had been appointed as head of its central bank.