Market Basics: Dollar May Briefly Slip Below 100 Yen
Wednesday, December 1, 1999
TOKYO (Nikkei)--Yen-buying from overseas investors looking to invest in Japanese stocks, along with dollar sales from the nation's exporters, will likely firm up the yen in the near future and possibly send the greenback below 100 yen temporarily, says Hikari Sekioka of Sakura Bank.
Japanese companies usually remit more profit to Japan from their overseas bases in January and February ahead of their annual book closings in March, so yen-buying demand tends to grow in those months, Sekioka says. The dollar will trade between 98 yen and 106 yen through the end of January, he predicts.
Sekioka discounts the possibility of the greenback settling below 100 yen, however. Finance ministers and central bankers from the Group of Seven industrialized nations expressed concerns over the yen's appreciation in a joint statement issued after a meeting in late September. If taken at face value, it makes concerted yen-selling interventions from monetary authorities in Japan, the U.S. and Europe very likely, he says.
Another G-7 meeting of finance ministers and central bankers is slated to be held in Tokyo in late January. The market will focus its attention on whether the Japanese government can secure further cooperation from other participants in curbing the yen's rise, Sekioka says.
(The Nikkei Financial Daily Wednesday edition)
|
