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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: Professor Dotcomm who wrote (2128)	11/4/1999 10:03:00 PM
From: Step1	Read Replies (1) \| Respond to of 3902

>>> But that was not the complete end of the story and the Swiss made a come back with its Swatch. My point, though, was that a rising currency takes some time before its effect becomes lethal.<<< While i am not an expert on currencies (or in anything financial for that matter) the case with the yen is not as dire as the one you describe with the Swiss Franc. In Japan, while the yen has certainly strengthen in the last few months (and that has been a fairly steady chartable path even from 2 decades on , the price of land and other basic needs businesses have (like good communications at a fair price ) have all come down due to the bursting of the bubble and deregulation. With more deregulation, more restructuring (evidently more pain along the way too) the cost of producing in Japan, on a relative basis (in other words assuming you are not producing bamboo baskets...) may still compare favorably to other parts of the world. So i agree with you that a slow adjustment process in the value of currencies is not so damaging, as long as other factors can counterbalance it. Nevertheless, short term, there are psychological levels that will create an immediate reaction, and the 110, 105 and 100 levels are example, although i seem to recall that the 108 level was more important technically. Right now, a number of interesting questions will have to get resolved in some way, and at this point, only a crystal ball would provide an answer. Consider this: US trade gap points to a weaker dollar eventual serious bear or collapse in US asset would probably herald some withdrawal of hot money weakening the dollar. Recovery in Asia also points to a weaker dollar WHILE the Euro trips over a RISE in interest rates in Europe (should normally have strengthened it. AND Japan , supposedly on its path to recovery , only will manage to post growth through massive government bailouts and subsidies for public works, creating (assuming it continues at this pace , 10 % of gdp,) perhaps the biggest debtor nation on earth, which as everyone would say a sure way to weaken the currency. SOOOOooo which way will it be? I honestly dont know. Only trying to discuss some realistic scenarios, not trying to pull a bear blanket over everything. Best Regards Stephan