Asia has been taking top billing again as the US and Japan finally intervened in the currency markets. Japan's ruling party won a vote of no-confidence last week over poor management of the economy maybe it felt the time had come to deliver after so many false starts.

Looking at the recently published statistics reminds me of reading Alice in Wonderland one set of numbers (the trade surplus) growing frantically, while another (GDP) is shrinking at an alarming rate. In fact, for the first quarter of this year, GDP has fallen by 1.3 per cent. As far as I can remember, Alice cried bitter tears when she grew so big that she couldn't stand upright and she nearly drowned in the tears when she shrunk. Japan was drowning in its own tears and flooding the rest of Asia.

It's the knock-on effect that worried everyone else so much. This week opened with pundits talking about a regional depression and the possibility of a world recession and got gloomier from there on.

Currency traders are generally staying short in the yen despite this week's concerted intervention to try and prop it up. But intervention only treats the symptoms and doesn't really tackle the cause, so most of the commentary is focused on telling the Japanese to sort out their fundamental economic problems which is where the government should come in. By the time the US and Japan took action the situation in Asia was particularly grim.

The Hang Seng Index in Hong Kong had fallen almost 30 per cent since May and 55 per cent since its high of August 1997, and the unemployment rate is at a 14-year high of 4.2 per cent. Consumer spending has plummeted and so have property prices.

Meanwhile, in Indonesia, people are still uncertain about the new president BJ Habibie. At least he tries to justify himself, which is more than Suharto ever did, but the student protesters want ever-faster reforms, prices continue to rise and the currency continues to fall.

South Korea is a problem area too. The currency is lower, small companies are going bankrupt and the unemployment rate has doubled.

In China, they have pledged not to devalue the yuan, which is difficult enough in itself, and leaves China looking extremely vulnerable in a region of collapsing currencies.

Even Australia is beginning to feel the effects of economic instability. The Aussie dollar has also been hitting lows and a significant proportion of its exports go to Japan and South Korea.

Meanwhile, in the US the consumer remains king, the dollar is still strong, bond yields are low, so is inflation and nobody can understand it. An absolute Wonderland.

Closer to home, and sparing no expense in my research for this column, I spent the weekend in London where I wanted to check (at first hand) whether or not the Monetary Policy Committee had made the right decision in hiking rates recently.

The members of the committee have been very sensitive to press criticism that they were panicked into raising rates and have been justifying the decision ever since.

My sister and I were staying near Oxford Street so that was our first area of research. Actually, I've never liked Oxford Street much, and I didn't like it much this trip either. Maybe I've just got too used to the fact that shops in Dublin are refitted (it seems) every couple of months, but I thought the high-street stores in the British capital looked dowdy in comparison to their counterparts over here. And it wasn't frantically busy either, although that could have been because it was so early in the morning. But Knightsbridge was a different story. By the time we actually got to Harrods my feet were absolutely killing me and if Mohammed al-Fayed had shown up and offered me a pair of soft shoes, I would have paid any price! But I wouldn't have seen him because Harrods was absolutely jam-packed with people. But were they shopping? That's a difficult one to answer because I didn't see all that many distinctive Harrods bags bulging with goodies. Maybe most of those who shop there get their purchases delivered.

We had intended to have a coffee there, but we hadn't a hope so we took off to Harvey Nichols in a kind of Ab Fab Edwina and Patsy sort of way muttering that what we really wanted was a cool glass of white wine. Upstairs to the 5th floor where HN has a cafe.

In fact, Yo Sushi, which is always popping up in restaurant reviews, is there, something I didn't realise. But the queues! There were at least 100 people standing in a queue for food. Why? If they were hungry they were going to die before they got any raw fish. If they were just waiting to be seen

well, no-one could identify them in the throng. It was manic and, if the prices in the cafe are even remotely like the prices in the rest of the store you'd faint before a morsel ever passed your lips.

I must look at British retail sales by value rather than volume next month. In HN a perfectly ordinary cardigan cost a cool £450. For a cardie! I know I lose it a bit in the shops sometimes, but that's losing it completely.

We did make a couple of purchases in the Food Hall though a bottle of langoustine soup (around £4), a packet of biscuits (around £2) and a bottle of Mango sauce (£2.95 with 10 per cent going to save the people of the rainforest which salved my conscience after all these reckless purchases).

However, I didn't buy the £450 cardie and we took the tube back to our hotel. The tube was packed with both shoppers and tourists. But I couldn't help noticing that most of the tourists seemed to be German. And there were very few Japanese. . .

Sheila O'Flanagan is a fixed-income specialist at NCB Stockbrokers.