Dollar/yen ambush? Message Board

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Non-Tech : Dollar/yen ambush?

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To: Bill Murphy who wrote (71)	10/7/1998 6:50:00 PM
From: Moneysmith	Read Replies (1) of 95

The de-leveraging effect was only one source of Yen strength. Japanese banks were selling to repatriate funds to cover balance sheet shortfalls. The negative view of the US economy/further cuts makes $$ deposits less attractive. The health of major US banks is now in doubt.(Especially if they were caught in the dollar/yen squeeze). We may see 110 on the Yen. Remember the May-June 1997 move from Y127.50 to Y110.00 it took until November for the dollar to recover to May levels. A suddenly strong Yen may not be what the Japanese want right now but a weak dollar is quite acceptable to the Fed.

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