Nearly a year after the economic crisis began, the nation that fuelled the rapid growth of Asia's tigers in the boom years of the past is slowly pushing the region towards a new disaster.

After sliding downhill steadily for more than two months, the yen finally collapsed through the 140-yen barrier Monday, hitting its lowest point for seven years and breaching a psychologically crucial level.

``We are now close to the critical level but still the yen is being allowed to fall in an orderly depreciation,'' said Susumu Kato, economist at Barclays Capital.

The lower the yen falls, the heavier the pressure weighing on Beijing to devalueits yuan. US President Bill Clinton, who visits Beijing next month, ``may be able to get a promise to maintain the present currency policy. But even that is not clear,'' Kato added.

After all Bangkok was adamantit would not devalue the baht even the day before it floated the currency last July setting the region on a destructive path to recession. Japan, Asia and the yen are entwined in a vicious downward spiral. The longer the region's crisis persists, the deeper the slump will be in Japan and the lower the yen will fall against the dollar.

And Asia's leaders are fully aware how perilous the situation has become.

``If the worst happens, like the Japanese yen goes down to 150, 160 or 170 (against the dollar) then the renminbi (or yuan) is in some difficulties as exports will become overpriced, investment will slow down and the economy will slow down,'' Singapore's senior minister Lee Kuan Yew acknowledged here last week.

Dollar buyers have been encouraged by the lack of intervention from either Tokyo or Washington to arrest the yen's slide. Already Tuesday the falling yen was gathering pace, pushing past 141 yen to the greenback.

The world's second largest economy, upon which the whole of Asia relies somuch, is in serious trouble. On Friday, official figures are widely expected to confirm Japan has been in recession since late last year. Tokyo and Washington are both apparently praying cheap Japanese exports will secure recovery.

As it rose from the ashes of World War II, the industrial giant that became Japan Inc. fostered the growth of its Asian neighbours and became the largest foreign investor for most countries in the region.

Its banks are owed an ominous $23 billion in loans from Indonesia alone. When last April, Prime Minister Ryutaro Hashimoto raised consumption tax from three to five per cent, intent on reducing the huge budget deficit, he hammered the final nail in the coffin for a fragile Japanese economy.Consumer spending crashed and the clouds darkened.

In November, Yamaichi Securities Co. Ltd, one of the country's most presitigous brokers, collapsed with banks finally refusing to bail out a heavily bad loan-laden firm. The biggest business failure here since World War II killed theremnants of consumer demand and pushed the economy into its first recession for more than 20 years. And so the yen has tumbled.

Now a Big Mac, or biiku maku as it is known here, costs much less in Tokyo, long considered to be the world's most expensive city, than in New York. And the reeling Asian nations, trying desperately to export their way back to good health, are finding their cheap prices overtaken by an even cheaper yen.

``Fears of further weakening of the Japanese yen have aroused concerns of an erosion of the region's newfound competitiveness and a delay in the much-anticipated export recovery,'' Lehman Brothers said in a report.

Tokyo has pinned its hopes on a record-sized 16.6 trillion yen (125 billion dollar) stimulus spending package, announced in April. Most here are less optimistic. That package, after all, brought to more than 80 trillion yen the amount Tokyo has spent vainly trying to revive its economy since the bursting of the speculative bubble economy in the late 1980s.