For the first time since the end of the Second World War, the US dollar fell below the 100 yen barrier yesterday to close at 99.93 in Tokyo, down .47 yen from its previous low of 100.40 set Friday in Tokyo. During yesterday's trading, the dollar slipped as low as 99.50. In the last three weeks the US dollar has fallen 5.45 yen.

Because the Bermudian dollar is on par with the US dollar, the decline in the US dollar will not have a direct impact but it remains to be seen if the higher yen will mean a jump in consumer prices, especially if Japanese manufacturers are unable to trim profit margins to compensate for the stronger yen.

Many of Bermuda's cars and motorcycles are made in Japan by companies such as Daihatsu, Toyota, Nissan, Mitsubishi, Subaru, Suzuki, and Yamaha. Many electronic appliances used and sold in Bermuda are also Japanese made.

Mr. Preston Hutchings, managing director at Butterfield Asset Management, said: "in the absence of a drop in prices by Japanese manufacturers, one would expect an increase in prices of Japanese imports.'' In fact, the US dollar has been dropping for several years, noted Brian Way, head of foreign exchange trading with the Bank of Butterfield.

"If the yen situation continues, the price of commodities will go up and we could suffer price inflation,'' he said.

But Mr. Way also noted it remains to be seen if Japanese goods will in fact jump in price as exporters there trend to be "highly productive''. As the yen strengthens, they seem to be able to squeeze out more productivity but they could be on the "edge of the profit margin precipice,'' he commented.

This represents a loss of confidence in the US dollar, he added.

Since 1970 the yen has moved from 350 to the dollar to psychological 100 yen mark.

If the Bermuda dollar was not pegged to the US dollar, it could climb against its counterpart but that move would surely have a negative impact on Bermuda in the tourism sector.

Japan's biggest fear is if the Yen continues to grow stronger it will hinder that country's economic recovery. The yen is now about 13 percent higher compared to the dollar.

TUMBLING DOLLAR -- A clerk watches the closing rate of the Japanese yen to the US dollar on a monitor screen at the Bank of Tokyo yesterday. The dollar fell below the 100-yen level for the first time since the Second World War. -- Reuter