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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (27814)	8/2/1999 9:37:00 AM
From: IQBAL LATIF	Respond to of 50167

On Japan we have talking about the potential rebound, todays news of interest.. Dollar Falls Against Yen; Investors Shun U.S. Assets, Buy Japanese Stocks By Siobhan Almond Dollar Falls; Investors Shun U.S. Assets, Buy Japan's (Correct) (Corrects that dollar at 5-month low in 1st paragraph.) London, Aug. 2 (Bloomberg) -- The dollar fell to its weakest level against the yen in more than five months amid speculation investors will buy Japanese stocks over U.S. assets as Japan's economy rebounds. The yen got a further lift from speculation Japan has stopped trying to weaken its currency to ensure its exports stay competitive. The Bank of Japan sold $35 billion of yen between June 10 and July 21, and has refrained from selling yen since then. Fund managers ''are looking at Japan and while it's not out the woods, the economy is improving'' and that's prompting them to buy stocks, said Uwe Fuehrer, head of currency sales at Credit Agricole Indosuez. Also, ''there's the expectation that any intervention will be the BOJ trying to slow the (yen's) move'' rather than weaken it, he said. The dollar fell as low as 113.91 yen in late morning London trading, its weakest level since Feb. 15. That's down from 114.63 late Friday. It has declined 3.5 percent against the yen since July 21, when the Bank of Japan last intervened. The euro slipped against the dollar as investors judged its 4 percent gain in the past month already reflects the outlook for improved economic growth in the 11-nation euro bloc. It fell as low as $1.0627 from $1.0700 Friday and was recently at $1.0668. ''We were buyers of euros lower down,'' said Paul Griffiths, a director at Invesco Asset Management which oversees $9 billion in fixed income from London. ''We see the euro around the $1.07, $1.08 level at pretty much fair value.'' Japanese Officials In Japan, vice minister for international affairs Haruhiko Kuroda said the nation doesn't intend to promote an economic recovery by weakening the yen to boost exports, according to Jiji Press. Still, he said his ministry is concerned that wild swings in the currency's value will hurt growth, the report said. ''There is now widespread skepticism in the foreign exchange market over both the resolve and ability of the Japanese Ministry of Finance to temper the appreciation of the yen against the dollar,'' said Paul Chertkow, head of global currency research at Bank of Tokyo-Mitsubishi. The yen has gained 9.5 percent since it touched its weakest level this year, 124.82, on May 20. The director-general of the Finance Ministry's International Bureau, Zembei Mizoguchi, reiterated officials' recent comments, saying Japan will take proper action as ''a rapid rise by the yen in the early stages of economic recovery is undesirable.'' Vice finance minister Nobuaki Usui said he'll watch the market more closely and '' take appropriate action as necessary.'' Investors, encouraged by signs the economy is picking up, have snapped up yen in recent weeks to buy Japanese stocks. While the benchmark Nikkei 225 stock index fell today, it has risen 31.5 percent since Jan. 1, compared with the 19 percent gain in the Dow Jones Industrial Average. Federal Reserve Worries that the Federal Reserve will soon raise interest rates again to cap inflation have hurt the Dow and Treasury bonds for three straight days. International investors selling those securities often convert the dollar proceeds to their home currencies. The Fed already lifted its target rate for overnight loans between banks by a quarter point to 5 percent on June 30. It next meets on Aug. 24, with its following rate session scheduled for Oct. 5. ''We'll get more from the Federal Reserve and sooner'' than previously anticipated, said Roy Adams, who helps manage $8.8 billion at Old Mutual Asset Managers. ''People are now saying August rather than October'' for the next rise in borrowing costs, he said. NAPM More clues on the outlook for U.S. interest rates will come with a report today on manufacturing industry. The National Association of Purchasing Management will probably say its factory index declined for the first time in three months in July. The index probably fell to 56 from 57 in June, according to economists surveyed by Bloomberg News. Readings above 50 suggest manufacturing is expanding. The euro declined, approaching its weakest level versus the yen, amid speculation Japanese investors may sell European bonds as the rising yen undermines the value of those assets. The yield on the benchmark 10-year German bund today rose 13 basis points to 4.94 percent. A Japanese investor who bought German government bonds at the start of the year would have lost about 9 percent, once currency rates, price changes and interest payments are taken into account. ''There's a lot of nervousness'' about German bonds and that's ''not going to help the currency,'' said Gerry Celaya, senior currency analyst at American Express Bank. The euro fell as low as 121.47 yen, close to its weakest of 121.14, reached on July 19.