The Yen is stronger because the USD is weaker. The bloom is off the Nikkei rose because a weaker USD makes it harder for Japanese exporters to make a buck selling to the U.S., and at the same time, the American consumer will have to spend more to buy goods from Japan so that means there will be less buying as well.

The same will happen with respect to India now. Just sit back and watch the Bombay Sensex index fall off.

In the case of Japan though, the situation is worsened because now that the USD has started to fall off, so too is the relative value of the China RMB. Japan has a huge trade surplus with China, which will be hurt now when priced in Yuan that are pegged (almost) to a falling USD.