High Yen Is a Mixed Blessing for Japan : Currency: The record run-up against the dollar boosts Japanese prestige and purchasing power, but it could also slow the sale of its products abroad.

TOKYO — Japanese industry, already suffering from one of its worst slowdowns in postwar history, is bracing for another bout with an old nemesis-- endaka , or a high yen.

The yen surged to an all-time high of 119.55 per dollar Thursday, although it has fallen back slightly since. Over the last three weeks, the yen has risen 8.5% against the German mark and 16% against the British pound. Much of the Japanese currency’s strength has come from investors seeking a safe haven amid the turmoil in European foreign-exchange markets.

The result is a boost for Japanese prestige and purchasing power, but it threatens to hurt the nation’s exporters by making their goods more expensive. So business executives are fearful that their sales and profits will drop further, dealing a fresh blow to an economy struggling under the burden of weak consumer spending and business investment.

“Sluggish domestic demand, and endaka --for us, it’s a double punch,” said Robert Inamoto, a spokesman for Mazda Motor Corp., which estimates that it loses about $25 million for each one-yen rise against the dollar over the course of a year.

Shoichiro Toyoda, chairman of Toyota Motor Co., said the yen’s strength “will prevent an early business recovery,” and Gaishi Hiraiwa, chairman of Keidanren, the leading big-business group, declared that “a weak dollar is not welcomed by Japanese industries at this time.”

A rising yen is by no means all bad for Japan, however, and government officials have issued relatively calm statements about the situation, while warning that the monetary authorities will intervene if speculators drive the yen up too sharply.

One much-cited reason for the outward calm in government circles is that a stronger yen could help ease trade frictions.

A strong yen gives an extra edge to foreign companies in their competition with Japanese firms, and it also tends to increase Japanese purchases of foreign goods. Yuji Tanahashi, vice minister of the Ministry of International Trade and Industry, said he finds the current level of the yen acceptable because eventually it should help reduce Japan’s trade surplus, which is headed for $100 billion this year. For the same reason, the Yomiuri Shimbun, Japan’s largest daily newspaper, said: “A stronger yen is welcome.”

Japanese companies coped brilliantly during a previous siege of endaka . Following the Sept. 22, 1985, Plaza Accord, which was aimed at driving down the dollar, Japan fell into recession as foreign demand for Japanese goods declined, but the nation then staged an eye-popping recovery.

Japanese companies invested vast sums to make their factories more efficient and shift much of their labor-intensive operations overseas, thereby enhancing their competitiveness.

But a repeat performance would be difficult. With the Tokyo stock market trading at less than half its peak and banks much more cautious, Japanese companies no longer enjoy access to cheap financing as they did in the late 1980s. Many have said they are through investing abroad for the time being.

Moreover, companies are curbing outlays for plant and equipment because of the stagnation at home. A government report this week showed that the economy slowed to a 1.1% annual growth rate in the April-June quarter.