YOKOSUKA NAVAL BASE, Japan — After last year’s breathless predictions of a plummeting Japanese yen from some of the world’s most prestigious financial firms, 2011’s predictions seem tame by comparison.

Of course, most of those daring 2010 predictions were dead wrong.

Instead of weakening 20 percent against the dollar, as brokerage firm Morgan Stanley prognosticated, the yen strengthened to nearly its highest levels against the dollar since the aftermath of World War II.

The resulting strength was a windfall for those servicemembers and their families who rarely spend money off base and receive a Defense Department cost-of-living adjustment.

Servicemembers receive COLA to make up for higher prices for goods and services overseas.

Biweekly COLA increases sometimes lag behind daily currency fluctuations. In the long run, they sometimes overcompensate servicemembers.

For example, the yen was 12 percent stronger Thursday afternoon than it was on Jan. 4, 2010.

However, a Yokosuka Naval Base E-5, living off base with two dependents, was receiving about 20 percent more in COLA on Thursday than the sailor would have received during the first January 2010 pay period.

Despite the COLA rise, servicemembers doing nearly all of their spending off base took a hit in 2010, as their buying power steadily dropped.

So what are the yen’s fortunes in 2011? Few economists are predicting major swings.

Many say that the dollar will slowly climb. Nearly everyone agrees that the yen’s value against the dollar will depend on whether the U.S. economy can pull out of its funk.

“What did happen [in 2010] was that the U.S. economy lacked dynamism, and consequently the interest rate was lowered in summer, leading to a high yen,” said Yoshikiyo Shimamine, chief economist at the Dai-ichi Life Research Institute.

Shimamine expects the yen to remain in its current 80-to-84 range against the dollar through spring. After that, he expects recent Federal Reserve moves and positive economic indicators to spur more investment in the U.S. stock market.

“When stock prices rise, expectations for U.S. economy grow, leading to a stronger dollar,” said Shimamine, who sees 95 yen to the dollar as a ceiling for 2011.

Yuji Kameoka, senior economist at the Daiwa Institute of Research, expects a similar pattern owing to a U.S. economic recovery.

“The signs already can be seen in an increase in U.S. consumer spending and a rise in stock prices,” Kameoka said.

Kameoka doesn’t expect the yen, which traded at 81.4 to the dollar Thursday, to get much stronger than it is now. By the end of 2011, the yen is likely to trade in the low-to-mid 90s, he said.

Elsewhere in the Pacific, the South Korean won remained relatively stable in 2010, at least compared to its 40 percent nosedive against the dollar from 2008 to 2009.

Analysts from six brokerage firms predicted an average of 1,050 won to the dollar by the fourth quarter of 2011, according to a Yonhap News poll.

That would be a roughly eight percent advance on the dollar, which currently buys 1,140 won.

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