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To: Smaven who wrote (37422)	7/20/1999 7:40:00 PM
From: goldsnow	Respond to of 116767

Trade War+ Expensive Oil = inflation X Stock Bubble = ? I thought Americans loved cheap steel in their autos? :) ANALYSIS-Yen intervention-more sizzle than steak? 03:50 p.m Jul 20, 1999 Eastern By Svea Herbst-Bayliss NEW YORK, July 20 (Reuters) - Japan swooped into the currency market on Tuesday in its latest attempt to stem the yen's strength against the dollar, but analysts questioned the move's lasting power in a market hungry for Japanese assets. Responding to a wave of yen selling orchestrated by the Bank of Japan -- its sixth intervention in as many weeks -- the dollar had charged up more than a full yen to peak at 119.68. But within hours, much of the gains had evaporated. ''Right now it is too early to tell whether this intervention will actually keep the yen down,'' said Mellon Bank trader Grant Wilson as the dollar listed under 119. Japanese officials have made no secret that they consider a stronger yen undesirable for their economy as the nation crawls out of recession on back of a surprisingly strong 1.9 percent real growth rate in the first three months of this year. But analysts and dealers say those nascent signs of recovery are precisely what have attracted investors into Japan and helped the benchmark Nikkei 225 stock index race ahead to a string of record closes for 1999. On Monday the index gained 1.5 percent to 18,532.58 points. Tokyo markets were closed on Tuesday. The United States' red hot economy continues to outpace growth in Europe and Asia, and the dollar has consequently been very strong against Europe's single euro currency; investors are keen to get into Japan ahead of the curve. ''What we are seeing is capital moving back into the Nikkei and that is helping the yen against the dollar and the euro,'' Mike Malpede, senior currency analyst at Refco Group Ltd, said. Technical analysts agreed that charts, too, pointed to more dollar/yen selling in the near term, with many casting an eye toward 117 yen and lower. ''Barring any more intervention to try to hold this up, I would suspect another move down to the 117 and we might even take that out,'' Bank of America analyst Ture Johnson said. John Tirone, technical analyst at Chase Securities, also said the charts pointed to further dollar weakness. ''Once the dollar has breached 117.60 yen it will trigger a sell signal in Elliott and regular chart terms suggesting an initial test of 116.90,'' Tirone added. The market had been bracing for a fresh bout of intervention since the yen surged 1.3 percent in Monday's U.S. session to reach five week highs against the dollar. Few traders were shocked when the Federal Reserve bought dollars for yen on behalf of Japan as U.S. trade got underway on Tuesday. A representative in the Bank of Japan's New York office confirmed the Fed had acted on its behalf; U.S. authorities declined to comment on the action. Several waves of morning dollar buying, beginning at levels just above 118, supported the greenback. ''The timing was not totally surprising and I think the move reinforces the fact we will trade between 122 and 117 yen -- but let's see how it pans out'' said Tim Fox, currency strategist at Standard Chartered. The new twist in the Bank of Japan's latest intervention was that it marked the first time the action was conducted through U.S. authorities. A month ago, the European Central Bank said it had sold yen for euros on Japan's behalf and other interventions were conducted during Tokyo trading hours. The intervention during New York trading prompted some traders to review talk of possible tensions between Japan and the United States sparked by Treasury Secretary Lawrence Summers' warning that domestic demand must be stimulated. ''The reports of friction read like fiction,'' Barclays Capital senior economist Henry Willmore said, adding that Tuesday's intervention per se does not shed new light on a conflict that may not even exist. ''It is inconceivable that the Fed would not honour its obligation to act on behalf of a foreign central bank,'' he said. ((--N.A. Treasury Desk, 212-859-1639 )) Copyright 1999 Reuters Limited.

To: Smaven who wrote (37422)	7/20/1999 8:08:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116767

EU boycott call over US tariffs Consumers are being asked not to buy US products like this Chrysler Viper French farmers are calling for consumers in the European Union to boycott American products after the US said it would impose high tariffs on European goods in the row over hormone-treated beef. Washington is hitting back at the EU for refusing to remove its 10-year-old ban on the beef. The EU says its scientists are worried that hormone-treated meat carries health risks, possibly causing cancer and triggering reproductive disorders in men. US scientists and the World Trade Organisation dispute this. Chocolate, onions on tariff menu Now the US plans to impose 100% tariffs on European goods ranging from chocolate and pork to onions and truffles. The sanctions will come into effect on 29 July. But two leading farm unions in France are calling on consumers to strike back. France will be hit by tariffs on many animal products, but also luxury goods like foie gras and Roquefort blue cheese. "To support the European Commission in its decision to retain its ban, we ask European consumers to boycott all products from the United States," said Pascal Coste, president of the young farmers' union, CNJA. 'Public opinion will rebel' He cited items such as Chrysler cars, electronic goods and Florida orange juice as examples which should be struck off shopping lists. "Public opinion will rebel against this. People are fed up that the Americans are telling us what we should eat," said Mr Coste. The farm union FNSEA joined in the boycott call, describing Washington's attitude as scandalous and accusing the WTO of complicity. The union's director-general, Yves Salmon, said the US was "taking hostage European farmers who have nothing to do with this conflict". Italian pork producers are also weighing up the implications of the tariffs. "It would certainly be a negative, unfair move which would damage us considerably," said Edoardo Marcucci of the National Association of Pig Farmers. He said the industry was already in crisis, with prices well below production costs. In the worst case, he said, Italy might stop exports of products like Parma ham to the US. Pork will be one the products worst hit by the tariffs, making up about one quarter of the $116m total. US officials say their list is designed to inflict the most economic damage on France, Germany, Italy and Denmark, as they believe that those nations hold the key to overturning the beef ban. news.bbc.co.uk