Rise and boom is not always a good sign, as is witnessed with the yen, which is close to a 15-year peak against the dollar, rising to around Y83.58 on Tuesday.
Mounting concerns about the US economy as US home sales plunged to a 15-year low last month forced investors to sell the green back and flock to the yen as a safe sanctuary.
Worries about the eurozone heightened as well since, with the exception of Germany and France, growth in the rest of the EU zone has slowed to near stagnation, with the euro falling to Y105.44 against the yen on Tuesday, a nine-year low.
The Japanese government is extremely wary about the steep rise in the yen against other currencies as exports have been the main driver for its economic recovery. Japans economy grew by 1.2 percent in the first quarter this year, backed by exports to Asia.
While the Japanese Finance Minister, Yoshihiko Noda, has expressed concerns about the rising yen, economists expect more concrete efforts and currency intervention to mellow down the upward pressure on the yen.
Though the government had been exerting pressure on investors through verbal rhetoric in the past, investors seem to have become immune to it, prompting the need for a more tangible intervention.
However, with interest rates already near zero in Japan, investors and money managers speculate there isn much room for monetary easing to help mitigate the rise of the yen.
The Finance Ministrys talks of yen-selling interventions helped diminish the pressure only slightly as the currency reduced marginally to Y84.43 against the dollar on Wednesday.
On the local front, Pakistan stands at a disadvantage with Japan having a share of 4.3 percent in imports to Pakistan in FY10, with electric equipment, machinery, automobiles and auto parts forming the major chunk of imports from Japan.
Interestingly, however, representatives in the electronics market do not seem to be very apprehensive about the rise in the yen and consequently the prices of electronics items.
"Most of the manufacturing of electronic products has been outsourced to other countries such as Malaysia by the Japanese companies; hence we expect only a marginal impact at best on product prices. The rising yen had not impacted prices even in the past few months," said an electronics dealer speaking to Business Recorder.
As far as automobiles are concerned, analysts claim that the strengthening yen will largely affect consumers, as companies will pass on the rising costs to consumers to protect their margins.
This means the changing dynamics of the yen are set to hit hard the already struggling auto industry of the country. So, a cry for intervention to the Japanese government makes sense even in the local scenario.