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The United States has been favouring a ''strong dollar policy'' for many years. But the recent remarks by the Treasury Secretary hint at the need for a weak dollar against the Japanese yen. The weakening of the yen against the dollar is contributing to imports from Japan getting cheaper and exports to Japan becoming costlier. For Japan, a weaker yen will help increase the exports to the US and also to help the inflation of the Japanese economy. The Bank of Japan has been embarking on currency market interventions to stop the yen from rising. The G7 Communique and the US Treasury Secretary''s visit to Japan have increased the pressure on Japan to let the exchange rates be determined purely by the market. A structured assignment ''103-062-4'' is available to accompany this case.