The phrase ‘hunky dory’ may have actually originated from Americans and Brits staying in Japan in the late 19th century.
The story goes that the principal street of Yokohama was Huncho-dori street, which literally means ‘main street’. Of course the main street is an easy way to recalibrate your sense of direction if you’ve lost your way in a city, so it’s thought that English-speakers may have begun to use Huncho-dori as a general term for everything going well (i.e. “everything will be fine once we get to Huncho-dori [main street].”)
What seems certain is that ‘hunky-dory’ was a play on an existing sense of the word ‘hunky’ for something that was fine, splendid or satisfactory. Therefore, it may be that ‘hunky-dory’ was the result of a bilingual pun, perhaps invented because American sailors knew the word ‘dori’ and prefixed it with ‘hunky’. A sailor on shore leave would feel that everything was OK when he was on the main street.
Another story, however , traces the origin back to the Dutch settlement of New Amsterdam: taking the word ‘hunk’ as derived from the Dutch word ‘honk’ for goal. When you reached the goal, everything was ‘hunky-dory’. How the dory got into the expression was not clear.
Now you know!