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TOKYO — A 25% increase in the value of the yen against the U.S. dollar during the past five months has stirred fears of a recession here among Japanese business and government leaders. But

Western observers are drawing a rosy picture of the Japanese economy. They see no decrease in the number of Japanese cars exported to the United States, no increase in the volume of

manufactured goods imported from abroad and no change in the annual increase in the U.S. trade deficit with Japan, which reached $49.7 billion last year. One Western economist predicts that

the double bonanza of suddenly depressed oil prices and the decreased cost in yen of Japan’s imports in general could bring about a “second Japanese economic miracle.” For all that, Japanese

business and government leaders are warning of a “high-yen recession” unless the Japanese currency stops its steady five-month rise against the dollar. ‘Dangerous Situation’ The U.S.

currency was worth 242 yen until Sept. 22, when the finance ministers of five major industrialized countries, including the United States and Japan, announced in New York that they would

attempt a major realignment of money values in an effort to drive down the value of the dollar. Since then, the dollar has plunged in relation to the yen. Trading ended Tuesday in Tokyo with

the dollar worth 180.80 yen. “I don’t say that this (the high yen) is the end of the Japanese economy, but I do think we are headed toward a dangerous situation,” said Takashi Ishihara,

chairman of Nissan Motors and of the Japan Automobile Manufacturers Assn. Ishihara, who said that things become unmanageable if the yen is stronger than 200 yen to the dollar, called on the

Japanese government to press for a reconvening of the five countries’ finance ministers to put an end to the rise of the yen. Shoichiro Toyoda, president of Toyota Motors, announced that his

firm loses the equivalent of $290 million every time the dollar drops 20 yen. “In January,” he said, “we raised the prices of our cars (in the United States) by 3%, but this will not be

enough to absorb (the exchange losses). Therefore, we cannot help raising our prices again.” Hit Abnormal Levels The governor of the Bank of Japan also hinted that the time might be near for

intervening in the market to prop up the dollar. And Michio Watanabe, the minister of international trade and industry, called for a drop in the central bank discount rate in order to

stimulate the economy. The discount rate decreased to 4.5% in January. Another Cabinet-level official said that the yen had reached abnormal levels and that Japan should not allow this to

continue. Small export-oriented companies are suffering because the suddenly strong Japanese currency is making their products too expensive abroad. News of that development overshadowed

predictions that nine privately owned power corporations stand to benefit to the extent of $5.5 billion as a result of the decrease in the cost of imported crude oil. Those companies depend

on oil for 40% of their fuel needs. Although Japanese officials are on record as agreeing to the need for a cheaper dollar in order to reduce Japan’s large trade surpluses with other

countries, the newspaper Sankei was expressing a popular view when it lamented in a recent editorial that the yen’s appreciation was so fast that export-oriented industries “have been dealt

a heavy blow.” “There seems to be no alternative for them,” the editorial added, “but to shift their market strategies and come up with entirely new products geared for exports.” Among the

industries that have become the object of popular sympathy--and the beneficiaries of a $1.7-billion low-interest government loan program that has been criticized by Clayton Yeutter, the U.S.

trade representative--are those that produce artificial pearls, toys, bicycles, gloves and stainless steel tableware. In announcing the loan program for small enterprises, Makoto Kuroda,

director of the Ministry of International Trade and Industry’s trade policy bureau, told foreign reporters that the high yen had brought export negotiations to a standstill and that the

government is “getting strong demand from industry for guidance.” Foreign Economists Disagree But the view of foreign economists is in sharp contrast to the pessimism of Japanese bureaucrats

and business leaders. “People seem to forget that crude oil accounts for about 40% of the Japanese import bill,” said a Western diplomat, who sees Japan’s decreased energy costs as having a

strong stimulating effect on the country’s manufacturing industries. “My ambassador wants me to make some policy suggestions but, frankly, I don’t think there is anything we will be able to

do,” said the economist, who sees Japan’s exporting industries becoming stronger as a result of stabilized domestic wholesale prices. Japan’s wholesale price index last month stood at the

same level as in January, 1980. One Tokyo stock analyst said that, even without the benefit of lower oil prices, Japanese exports of automobiles and semiconductors would not be adversely

affected by higher yen values. “The decline in the prices of memory chips has far outstripped any increases in the value of the yen,” said Peter Townsend, securities analyst at Morgan

Stanley’s Tokyo office. According to Townsend, the price in yen of 64-kilobyte RAM (random access memory) chips is one-third of what it was in October, 1984. Similarly, Japanese

manufacturers have marked down their 256K RAM chips to 40% of their May, 1985, value. “That’s a much faster rate of decrease than the rate of increase in the value of the yen,” Townsend

said. He also saw the demand for Japanese cars in the U.S. market unaffected by any price increases brought about by the higher yen. “American consumers have been paying premiums on Japanese

cars even before, so they will continue to buy them even if the prices rise,” Townsend said. An economist at Morgan Stanley, who asked not to be identified by name, was even more optimistic

than Townsend. He said low-cost oil and the low, yen-denominated cost of imported raw materials in general may have put Japan “on the threshold of a new economic miracle.” He added:

“Although the initial beneficiaries of low-cost oil will be the utilities, oil refineries and other consumers of energy, in the long run, competition in the marketplace will result in lower

prices for everyone.” But one place where there is little competition, and hence no decrease in prices, is in imports in Japan even though, in theory, the high yen was to have made imported

products cheaper. The strong yen seems to have done little for imports of American automobiles in Japan. In January, 92 U.S.-built cars were sold here. According to the Japan Automobile

Importers Assn., that was a decline of 43.6% from January, 1985. Foreign economists here say that Japan’s trade imbalance will not be corrected by the high yen--not because the price of

foreign products is too high but because Japan does not import much in the way of value-added manufactured goods. Fully 65% of the $120 billion in Japanese imports was food, fuel or metal

ores. By contrast, Japan’s exports of $170 billion are almost all manufactured products. MORE TO READ