heinz--The Japanese (along with the Thais) seem a bit nervous prior to the "non-event."
Fair Use/etc...
FOREX-Yen stays buoyant in absence of BOJ action By Shinichi Kishima LONDON, Dec 28 (Reuters) - The yen remained broadly buoyant on Tuesday, quickly recovering early losses amid persistent year-end commercial demand in the absence of Bank of Japan intervention. Expectations the Japanese economy would continue to recover next year and Tokyo stocks would extend gains underpinned bullish sentiment on the yen, although wariness of BOJ action kept dollar/yen well inside a relatively tight monthly range between 101.20 and 103.80 yen for December. Michael Rottmann, currency strategist at HypoVereinsbank in Munich, said the dollar's range-trading with some downward bias would likely continue until the next meeting of Group of Seven finance ministers to be held in Japan in January. "Until then, the MOF (Ministry of Finance) and the BOJ will cap pressures on the downside, but this won't change the trend," he said. "We still believe that the low end of the range is somewhere between 101 and 102, more or less based on fear of intervention, and the upper end should be between 103 and 104." The greenback did briefly hop as high as 102.70 yen in Asia as a few buy orders made a big splash in a very illiquid market. That in turn stirred talk of BOJ involvement, but dealers were sceptical and the dollar quickly faded below 102.50. With the year's business drawing to a close, order flows appeared to be dominated by last-minute commercial yen buying, namely repatriation of foreign currency receipts by Japanese exporters into yen, and some hedging activity. The yen easily weathered the BOJ's decision to leave a staggering 9.1 trillion net surplus in the money market, more than twice Monday's 4.5 trillion yen, which itself was a record. The BOJ said the surplus was boosted to prevent Y2K pressures from inflating the key overnight rate, which it has long kept around 0.02 percent. Tokyo dealers said the huge surplus blurred the argument over "unsterilised intervention", in which the BOJ leaves extra yen funds in the private sector resulting from its forex intervention in order to subdue demand for yen. The BOJ has long argued such a policy is meaningless. Indeed, dealers found it hard to see what difference it would make by leaving Friday's intervention unsterilised when the transactions settled today, as it probably amounted to a couple of billion yen amid an overall surplus of nine trillion. "The intervention is small beer," said a dealer at a European bank. "You can't even spot it amongst all this liquidity." Today's helping of Japanese economic data was again too mixed to provide direction for the market. The unemployment rate dipped rather unexpectedly to 4.5 percent in November from 4.6 percent. But the Tokyo consumer price index which showed a steep 1.5 pct fall year-on-year in December, the biggest drop since 1971, while wage earner's spending fell a real 2.4 pct year/year in November. Meanwhile, the euro was stuck in a very tight band [M] [T] [NAT] [MF] [D] [FN] [N] [BL] [SW] [NW] [P] [PTGF] [CTPT] [DA] [OE] [US] [FRX] [DE] [JP] [WEU] [EUROPE] [EUR] [LEN] [RTRS] [XREF]
(I understand from a poster in Japan that this was their last regular public banking day until Jan. 4, 2000?...I'd be nervous and bulging with cash too...)
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