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This paper argues that, apart from exchange-rate aspects, the East Asian economic crisis has looked very similar to a domestic banking crisis arising from boom and bust cycles in bank lending and capital investment. One of the key determinants of the boom-bust cycle in East Asia was the sharp appreciation of the yen against the dollar between the mid-1980s and the mid-1990s, and its subsequent depreciation. Real investment and speculative financial capital within and into East Asia responded too much to the yen movements. The paper also discusses factors behind large medium-term movements in the yen-dollar rate. [ABSTRACT FROM AUTHOR]