Among the largest economies the immediate focus of the international financial crisis in the last three weeks has significantly shifted to Japan - where the government has been loosing its battle to hold down the yen's exchange rate.
This trend is illustrated in Figure 1 - showing the exchange rate of the yen against the dollar since the beginning of 2000. From 2000 to March 2008 the yen remained below its 3 January 2000 exchange rate of 101.7 yen to the dollar. This low exchange rate was maintained by fairly consistent intervention by the Japanese authorities - which saw such a low exchange rate as critical to aiding the competivity of Japan's exporters.
Therefore when in March 2008, under the impact of the gathering financial crisis, the yen moved above its beginning of 2000 exchange rate Japan again intervened vigorously to drive it down again. At that time it succeeded - essentially driving he yen below its beginning of 2000 exchange rate until mid-October.
How since mid-October, despite continuing Japanese Central Bank intervention, the yen's exchange rate has moved upwards - by 5 December rising to a level 10.3 per cent above its beginning of January 2000 exchange rate.
The result was sharp falls on the Japanese stock market amid fears that at the new higher exchange rate Japanese exporters would be uncompetitive and their profits would fall.
Thus, to take international comparisons, during the last three weeks share prices in the US have been essentially directionless. The Dow Jones Industrial Average hit its low for the current downturn on 20 November at 7552.3 - a fall of 46.7 per cent from its peak in October last year. Since then this low has not been seriously tested - although neither has any trend of recovery set in. This is shown in Figure 2.
The low point of the decline of the Nikkei since the bursting of the 'bubble economy' at the beginning of 1990 was on 27 October this year with a decline of 81.6 per cent. On 5 December the Nikkei was still 79.7 per cent below its level at the end of 1989 - at the same period of time after the crash of 1929 the Dow was 52.5 per cent below its peak level.
The Nikkei's performance after 1990 is therefore now clearly the worst of any major stock market in history.