JAPAN-Nikkei-Time to go back up? Message Board

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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up?

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To: chirodoc who wrote (1507)	10/9/1998 2:26:00 PM
From: John Carson	Read Replies (3) of 3902

I was listening closely to Greenspan in his testimony to Congress a few weeks ago and perked up when he said the Fed had several other ways to stem the global economic crisis besides lowering interest rates. Could the Fed have bought a huge amount of yen this week and sold dollars. A fall in the dollar would strenghten U.S. exports and multinationals and would help the rest of SEA, except Japan. This would take the place of an immediate big cut in interest rates and allow the Fed to bide some time. A devalued dollar now puts pressure on Japan as they find it hard to export goods with an artificially inflated yen. The rest of SEA is bolstered and takes the pressure off of China to devalue. The Nikkei starts dropping as earnings are hurt by decreased exports and puts even more pressure on Japan to reform their banking system. I feel Japan has not acted yet in the way they should because the average person in the street in Japan has not felt the pinch yet. Once they see their Nikkei slice through 12000 they may put the needed pressure on their government.

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