Debate is heating up in the United States over the pros and cons of the current foreign exchange policy being pursued by the U.S.

While high-ranking government officials and Wall Street gurus openly advocate a strong-dollar policy, skepticism abounds among corporate executives, industry leaders and scholars.

Treasury Secretary Paul O'Neill and Economic Affairs Assistant Lawrence Lindsay have frequently been quoted in media reports as saying that a strong dollar remains in the U.S. national interest.

Paul Krugman and other scholars have taken issue with this view, however, and are calling for a shift in the country's foreign exchange policy.

As always, expectation is widespread in the U.S. that a weaker dollar will help the lethargic domestic economy.

Yet, there appears to be little likelihood that Washington will come to the rescue of a falling dollar in the foreseeable future.

In Japan, government officials and industry leaders appear to be pinning their hopes on concerted efforts to drive down the yen. They believe a weaker yen could serve as a catalyst for economic recovery.

Indeed, pressure is mounting for a policy initiative to keep the yen from rising any further and to guide it lower against the dollar.

Pressure within the U.S. for a weak dollar may intensify as the chances of a quick economic recovery become more remote.

Given the current environment of the global currency market, Japanese expectations of a weaker yen could turn out to be a case of wishful thinking.

In short, I assume the yen will gain further ground against the dollar in the near term.

There seems to be a good chance that Japanese monetary authorities will step in to drive the yen lower against the dollar when it strengthens to around 115, although Washington will probably pursue a hands-off policy.

The administration of U.S. President George W. Bush has said that it remains committed to a strong dollar, but intervention by U.S. monetary authorities in the currency market appears unlikely.

Washington's inaction could come back to haunt the beleaguered Japanese economy.