Weekly Forex Outlook: Dollar Seen In 104-108 Yen Range
Monday, January 17, 2000
TOKYO (Nikkei)--The dollar is likely to hover against the yen this week ahead of the meeting of the Group of Seven finance ministers and central bankers on Jan. 22, market watchers said.
Traders are likely to take a cautious stance in buying the yen, as concerns over the stronger yen are expected to be expressed at the G-7 meeting. But the yen is unlikely to face one-sided selling, as the Nikkei Stock Average is recovering, watchers said.
Market expectations are centered on a 104-108 yen range for the dollar this week.
Japan's position as chair of the G-7 meeting makes it more likely that concerns over the stronger yen will be expressed, said an analyst at Dai-Ichi Kangyo Bank. Many analysts believe it will be difficult to continue buying the yen actively.
The Bank of Japan is stepping up efforts to absorb funds supplied to the market late last year out of concern about possible Y2K problems. Market players, however, still view the excessive supply of funds as a quantitative easing of credit, which may encourage them to sell the yen.
The yen, however, is unlikely to drop sharply, as exporters will make forward exchange contracts to sell dollars at lower yen levels, an analyst at Asahi Bank said.
(The Nihon Keizai Shimbun Sunday edition)
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