Crystal balling is nice but unpredictable and unreliable. If history could predict future events, the wealthiest people would be librarians. And if there were reliable ways to predict the future, you wouldn't tell others of it.
The fundamental questions asked her are, can the US government manage the currency and prevent it from dropping to critical levels? And would the Japanese economy enjoy the benefit from a weaker US dollar? Finally, would Japan and China like to see their holdings of US dollar debt behave?
Management Options
Despite popular belief, the US government has many options at their disposal. In the worst-case scenario, the US could end its floating currency regime and fix the exchange rate by pegging it to the euro. This would be a massive shift in US policy, complete the dollar's dominance of the financial trade, and safeguard trillions of US debt. This would be the most sensible way if everything else broke down. Do note that the US dollar had several massive depreciation (not devaluations since the US dollar is a floated currency) in history, around 10-30%. Als,o note that the euro is about 60% of the USD's currency basket. This could mean the euro is appreciating very intensely against the US dollar. And in the end,d anyone, besides Bus, can manage the economy better.
Strong Yen not good for Japan
The other thing, Japan needs a weaker currency. Japan's economy is export-oriented, just like China's. If Japan's currency is stronger than the Uy, then you might as well close the Japanese economy and call it a day. However, a stronger currency might help the Japanese finance market, even though that one is already in tatters. Unfortunately, due to the negligence of Japan's politicians, Japan has lost the title of regional financial capital to little brother Hong Kong. Economic solid reforms are needed.
USD collapse will make you cry!
And here is where the cake will hit the fan. A fall in the US dollar would drag China, Japan, Saudi Arabia and anyone else foolish enough to trust the US dollar to hell with them. On a positive note, we Europeans will laugh our a$$es off. I would happily say that the USD would never fall from grace, but who can be 100% sure? There is always a tiny chance it might. Note that the USD has only 10% of the Japanese Yen allocated to its currency basket.
Meanwhile,e the euro has quietly surpassed the USD as the most valuable currency in circulation and the biggest current in terms of total value in the market. The four reserve currencies in use today are (in order of use as reserves) the USD, euro, Pound and Yen. The euro is now the strongest currency, with the Pound also weaker than the euro. There is talk in Britain of dumping the Pound in favour of the euro.