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To: goldsnow who wrote (35309)	6/14/1999 5:49:00 AM
From: Zardoz	Respond to of 116753

FX IN EUROPE - Dollar/yen bolstered by BOJ buying LONDON, June 14 (Reuters) - The dollar struggled to stay near highs it set early in Europe after shooting up three yen from overnight levels on heavy Bank of Japan intervention. The dollar, which dipped below 118 yen in Asian trading, was forced higher toward 120.85 yen by repeated BOJ intervention -- rumoured to have bought more than $5 billion for yen -- before drifting off slightly. ''They have really made quite a mark on it,'' said a dealer at a European bank in London. ''It is a sure sign that they don't want dollar/yen going below 117 (yen).'' At 0720 GMT, the dollar stood at 120.35/40 yen versus 118.01/06 in Friday's late European session. Eisuke Sakakibara, the Japanese Finance Ministry's foreign exchange guru, said overnight that Tokyo would ''prevent excessive strength in the yen'' in order to ensure Japan's economic recovery stayed on track and that it would ''take decisive action if necessary.'' ''The market sort of tested MOF's resolve by going for the lows,'' said a trader at a Japanese bank in London, referring to the dollar's decline toward the mid-117-yen area -- the lows seen just before last Thursday's surprise BOJ intervention. Traders said the market was still top-heavy but unlikely to aggressively test the downside now, given the 2-3 yen bounces the dollar made on BOJ interventions in the last few trading sessions. The European bank trader added that had there been no intervention, more dollar selling could have been triggered by hedge funds unwinding short yen positions. Moreover, as long as the dollar maintains a range of around 117-123 yen, Japanese exporters will have had an average exchange rate of around 120 yen at the end of the year. This should help keep Japan's economic recovery on track, he noted. The euro, which last week halted its decline from the January highs, was drifting slightly off Friday's highs. The euro stood at $1.0480/85 at 0833 GMT, below Friday's $1.0558 peak but well above the $1.0254 lifetime low it had put in a week ago. The Group of Seven finance ministers did not make any specific mention of coordinated euro-support measures after their weekend meeting. Still, Bundesbank President-designate Ernst Welteke said the euro had potential to rise, given the end of the Kosovo crisis and Europe's trade surplus. Traders saw the euro's upward momentum fading somewhat after last week's rally but added there was a general consensus that a near-term bottom had been put in. The key to the euro's fortunes is expected to be this week's German Ifo survey. ''The euro stabilised last week but the enthusiasm to buy it has not been that great,'' said Tony Norfield, head of global treasury research at ABN Amro in London. Still, ''any strength in the Ifo should help the euro.'' Sterling was firm against the dollar, helped by the dollar's general softness against the euro and the yen lately. Sterling/dollar stood at $1.6140/45 from $1.6090/00 Friday. May U.K. producer prices, which showed output prices unchanged on the month and 0.9 percent higher year-on-year, had little impact on the pound. Input prices fell 0.5 percent, a 2.9 percent decline from a year earlier. Traders said results of the the European parliament elections were largely as expected, with Britain's opposition Conservative party winning 34 seats in England and Wales to the Labour party's 26 on the back of a eurosceptic platform. Senior U.K. cabinet minister Jack Cunningham said the Labour government's position on joining the euro was unchanged. biz.yahoo.com