Further appreciation of the dollar paired with the Japanese yen could trigger a new financial crisis in the Asian region, former Goldman Sachs economist Jim O’Neil believes.

“If the yen continues to get cheaper, China will see it as an unfair competitive advantage, so the parallels to the 1997 Asian financial crisis are obvious,” O’Neil said in an interview with Bloomberg. – China won’t want the weakening of other currencies to hurt their economy.”

The dollar-yen exchange rate strengthened to nearly 135 yen per $1 the day before, jumping 16% since the beginning of the year. The reason for such a sharp rise is the divergence between the monetary policies of the U.S. and Japanese central banks: the Fed has begun to actively raise rates and reduce assets on its balance sheet, while the Bank of Japan still adheres to an ultra-soft JCP.

In late March, former Japanese Deputy Finance Minister Eisuke Sakakibara, nicknamed “Mr. Yen,” allowed that the Japanese currency could fall to 150 yen per $1, reaching its lowest level since 1990.

If that happens, Beijing could take measures to weaken the yuan, which in turn could trigger a chain reaction throughout the region, said O’Neill, who became known as the creator of the term BRIC (Brazil, Russia, India, China).