April 2 (Bloomberg) -- Studying the ``magazine-cover curse'' is a favorite pastime of many a market analyst. The idea is that by the time a phenomenon or a person reaches magazine-cover status, it's often all downhill from there.

Such may be the case with Japan's war against currency traders. Only, the yen isn't experiencing the curse of the magazine cover, but of the comic-book cover.

Loads of salarymen riding Tokyo's subway system are reading an unlikely ``manga'' comic series on Japan's yen sales. Part of the popular ``Golgo 13'' action-hero serial, it spins a sinister tale of U.S. officials pressuring the Bank of Japan to buy dollars. The reason: To avoid a meltdown in the world's biggest economy.

``On the assumption that once a financial trend becomes part of the cultural zeitgeist it must be near the end,'' says Ian Douglas, chief bond strategist in London at UBS AG. ``It's interesting to see BOJ foreign exchange intervention finding its way into the Japanese comic book sector.''

Coincidence or not, that's exactly what's happening. Recent reports that Japan's Ministry of Finance is reducing yen sales are being confirmed by the currency's advance.

Remarkable Tolerance

Japan spent hundreds of billions of dollars over the last 15 months weakening the yen. Now, it's displaying remarkable tolerance as the yen rises to its highest level in four years. It's up more than 7 percent since March 8.

Japan sold 4.7 trillion yen ($45.2 billion) in March, which was less than the 5.2 trillion yen average of the past two months. Now that companies have closed their books for the fiscal year ended March 31, there's even less reason to weaken the yen to help exporters. Officials here in Tokyo seem to be realizing that.

The BOJ's Tankan survey, for example, showed sentiment among large manufacturers was the highest since 1997 in March. The index rose to 12 from 7 in December. Some observers were even more optimistic about the details of the report.

``To me, this was the strongest Tankan since 1991, when the bubble was bursting,'' says Richard Jerram, chief economist at ING Securities (Japan) Ltd.

Asia's biggest economy still has formidable challenges, including reducing government debt, trimming banks' bad loans and boosting competition. It's imperative that the policy complacency that stamped out previous recoveries doesn't destroy this one, too. If it does, Japan will resume its yen-selling campaign.

Time to Step Back

Yet Japan's export-led rebound is broadening to other sectors of the economy, spurring households and companies to spend more. It's boosting corporate earnings and profits at the nation's beleaguered banks.

A rising yen might help. If foreign investors believe the yen won't be falling, more may move capital into Japanese stocks. All told, now is as good a time as any to step back from the most aggressive effort to steer the currency markets in modern history.

Of course, one wonders if that's really what the U.S. wants. The Bush administration faces a be-careful-what-you-wish-for situation here. It says Japan should stop devaluing the yen, an effort that makes U.S. goods less competitive and encourages the rest of Asia to weaken currencies, too. Trouble is, fewer dollar purchases by the BOJ could lead to higher U.S. bond yields.

All of which brings us back to the world of Japanese manga comics. The thriller series, ``Golgo 13,'' has been around for more than 30 years and often works current events into its plots. Its latest tale of U.S. puppet masters forcing compliant Japanese officials to buy dollar-assets attempts to do just that.

Yen, Sex & Violence

While there's little doubt Japan benefits from steering the yen lower, the U.S. does, too. Conspiracy theorists have long suspected that the U.S. encourages Japan to buy huge amounts of Treasuries to help the U.S. finance its record current account deficit. The gap is about 5 percent of gross domestic product.

The mundane dealings of the BOJ are improbable fodder for comic writers. So, it's not all dry economics; the Big Comic magazine series tosses in sex and bloody violence, too. It even incorporates thinly veiled parodies of Condoleezza Rice, the U.S. National Security Adviser, and White House strategist Karl Rove.

Yet the fact currency markets have become the stuff of pop culture says much about Japan's fascination with its economic problems in recent years. It's also a reminder of the yen's pivotal -- and controversial -- role in Japan's recovery.

This isn't the first time geopolitical power and international finance have collided in popular Japanese culture. Three years ago, novelist Main Kohda published a best-selling thriller about Japan's bond market, called ``Nihon Kokusai.''

It told a story of bond traders, fed up with the government's incompetence, conspiring to boycott a bond auction to teach politicians a lesson. The action sends shockwaves across the global financial system and nearly brings the U.S. economy to its knees.

The financial world is rarely, if ever, that intriguing. Yet now that Japan's currency maneuvers are mainstream enough to warrant comic book covers, perhaps the trend is pretty much over.

To contact the writer of this column: William Pesek Jr. in Tokyo wpesek@bloomberg.net

Last Updated: April 1, 2004 20:04 EST