Dumb it Down: Yen's Strength and its Effect on the Japanese Economy

I have heard conflicting information about the effect that the strengthening Yen has on some major Japanese companies and their economy as a whole. Although it the strong Yen may be bad for Sony and Toyota amongst others, for all those people hiding money under their mattress, isnt it a good thing? Please explain to me the advantages to a strong Yen, and the disadvantages. From what I can tell from all that I read, Japan is headed toward a horrible problem if their currency continues on this trend.

Food for thought. The second largest economy in the world imports 99% of its oil. It is a strange fact, but one that could be manipulated into every theory one has about what is going on in the world right now. Just think of it, the second largest economy is 99% reliant on outside forces. Weird. Also weird, the second largest stock exchange by capitalization is at 27 year lows making it ... well, worthless. Something has got to give, right?

http://www.yomiuri.co.jp/dy/business...10TDY08306.htm - Yen strength ... "Like other export firms, Toyota can suffer big losses with a mere 1 yen rise in the value of the Japanese currency--potentially as high as 40 billion yen on an annual basis, according to the company."

the GODS of the market have spoken with a thunder voice,
the japs can do nothing about it,
they have tried it before and failed

Im a huge fan of the Yen. I would even go as far as saying, "its the perfect pair to trade". Affordable, decent P/A movement, low spread/margin cost. I even think the u/y is a better trade than e/u.

But lately ... it has not been my favorite pair (by a long shot). Its seems to be caught in a very terrible downside range. So I have to believe there might be manipulation in the works. I've seen th effects of the government getting involved and pusing the yen to a higher profit point ... and have seen the outcome after such actions.

If the giverenment interven ... Yen P/A will enjoy a small momentum push in its direction. But as 'arthurb' said, "the P/A gods will not be so easily impressd". After a temp bust ... P/A will fall. Its been like that for any government looking to move their currency out of the red. It reminds me of today ... US government hyping up the economy/currecny and what will happen after their is no more "good" information to be announce, USD will fall against all pairs.

If the Asian governments knew whats best for its economy ... they would well enough leave its currecy alone. What ever will happen ... happen!