Ya, going with the yen would seem to make more sense if one thinks this analysis has any value, than with the Euro.
With regard to both your posts, the trillion dollar question is what China will do. China is the unstoppable force in this equation; there are no immovable objects.
The yen is not the refuge one would think simply because the Bank of Japan is the most interventionist central bank in the world, and they are determined to keep the yen cheap for the time-being. They will fight tooth and nail against China revaluing at their expense.
Our options here are limited: someone is gonna get the long, fat end of the shaft. My guess is that the Euros will put up a more limp-wristed fight than the Japanese. =)
Actually, all of this should balance out OK if Germany can kick itself back into gear, and I personally think that they will under Angela Merkel. We shall see!
Also, this discussion has completely ignored the Eastern European boom, and the consumer market growth that will inevitably follow, and that those nations will begin drifting into the eurozone during the coming decade. I am also of the opinion that Britain will ultimately win this current spat about reordering and reinvigorating the EU. Anyone who thinks that Blair's motivation is to weaken the EU is projecting. Europe's big political stumbling block is Jacques Chirac and he'll be gone by 2007 to nary a lament...