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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: Lucretius who wrote (27399)3/24/1999 12:01:00 PM
From: Defrocked  Read Replies (2) of 86076
 
LT, I sincerely appreciate your bearish viewpoint
on the dollar/yen.<ng> Your counterpoints make worthwhile
reassessments for my position, which I am not married to.

But let me advance my counterarguments to your perspective.

(1)Everybody is on the same side of the boat when it
comes to end-of-March repatriation so the expectational
surprise may likely be opposite, especially so close to
the end of the month. Much repatriation may have already
been executed.

(2)A rising yen is a definite threat to Japan's recovery.
Currency intervention by BOJ/MOF is highly likely below
117. This operation would buy dollars/sell yen, actually
augment their current money growth strategy, and aid more
profitable repatriation in the process.

(3)Commercial positions in yen futures are often arbitrage
positions and therefore reveal little about hedger intentions
that some believe are meaningful in other markets. Yen futures
are insignificant to the forward currency market.

(4)IMHO an equity crash in the US that slows down US real activity
would remove the last underpinning of global growth and potentially
damage Europe, Lat.Am., the Far East including Japan even more
than here. But a depression scenario is highly unlikely unless you
count the many depressed Internet and other overexposed equity investors who may lose significant expected wealth. The dollar should
continue to be a safe haven in the event of global turmoil.

BWDIK. Good luck.
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