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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (35955)	12/24/1999 1:19:00 PM
From: theRedDog	Respond to of 99985

HAPPY HOLIDAYS to all, contributors and lurkers, past and present. This is one of the best threads of SI. It has mutated a bit since Don and LG departed, but the result is equally worthy, albeit different. I miss the oversold, overbought calls, (although this mania-market has made them temporally unreliable) but the interchange of free-form information keeps shining bright, and the data to noise ratio remains surprisingly high. A special thanks to LG for creating , and nurturing it for over a year. You should be proud of the high level of contributors that you were able to convoke. Cheers, theRedDog.

To: pater tenebrarum who wrote (35955)	12/24/1999 3:43:00 PM
From: Don Green	Read Replies (2) \| Respond to of 99985

heinz Be careful with Apple, them Apple shareholders are almost cult members, also Apple often does better when the market is tumbling.. regards don

To: pater tenebrarum who wrote (35955)	12/24/1999 3:44:00 PM
From: Don Green	Read Replies (1) \| Respond to of 99985

Bank of Japan Intervenes In Market To Defend Yen By NICK SHINDO Dow Jones Newswires TOKYO -- The Bank of Japan intervened in the currency market Friday for the first time in nearly a month, buying an estimated $1 billion for yen. The intervention lifted the dollar to as high as 103.12 yen from around 101.90 yen before gains were pared by selling by Japanese exporters and life insurers, traders said. See more information on foreign-exchange trading from Briefing.com. In afternoon European trading, the dollar was at 102.75 yen, up from 102.21 yen late Thursday in New York. The euro was at $1.0150, down slightly from $1.0157 late Thursday. To make sure that the market got the message that Japan now is serious about combating yen strength, both Finance Minister Kiichi Miyazawa and Haruhiko Kuroda, the vice finance minister for international affairs, took the unusual step of confirming that the Bank of Japan had intervened. But why now? Senior Tokyo traders say that the Finance Ministry appears to be afraid of a sharp dollar sell-off that might result if technical support levels are breached, which could result in a psychologically devastating drop of the dollar below 100 yen. Japan is afraid that if the dollar drops below 102 yen for long, large yen buying orders could rapidly propel the dollar below 100 yen in the thin year-end market. "MOF's strategy is based on holding a firm defense line above the key 100 yen level," said Taisuke Tanaka, foreign exchange strategist at Credit Suisse First Boston in Tokyo. "Given that there is still a yen strengthening bias in play, in practice this has meant trying to keep the dollar pegged to a 102 to 104 yen range," he said. Traders say it's especially important for the Bank of Japan to intervene now because any moves will be exaggerated by thin year-end trading conditions. Daily spot volume in dollar-yen trading typically falls to about 60% of average in December, but this year it's less than the 40% because players are reluctant to build new positions ahead of the year 2000, says Minoru Shioiri, assistant foreign exchange manager at Nippon Credit Bank. That means that the Bank of Japan will continue to enter the market if the dollar breaks below the central bank's line in the sand at 102 yen, say traders. "If the dollar creeps below 102 yen again next week, I would expect the BOJ to intervene again," says Hidenori Watanabe, assistant general manager of foreign exchange at Dai-Ichi Kangyo Bank. While Japanese authorities look determined to defend the dollar for as long as possible, even they may be resigned to the view that attempts to reverse the stronger yen are futile, analysts said. The biggest reason for that is a familiar one -- foreign investors still want to "buy Japan," and the resulting capital inflow is likely to push the yen higher. Japanese institutional investors also are expected to bring money home from abroad before Japan's fiscal year-end in March 2000, and to sell dollars in an attempt to hedge their remaining overseas assets. That combination of capital inflows is expected to push the dollar down to 95 yen in due course, traders said. The only thing that could reverse the yen's course would be if Japan's Group of Seven industrials nations partners joined in coordinated yen-selling intervention. But traders say they see no signs that the U.S. and other nations are ready to help Japan, even though Mr. Kuroda said Friday that Japan's G7 partners haven't changed their stance that they would cooperate to prevent an excessive appreciation of the yen. Traders say there is some wariness over whether G7 finance ministers could commit to joint intervention when they meet late-January in Tokyo. The thinking goes that since they are meeting in Japan, the G7 might be more prone to granting Japan's wish. But other traders are skeptical about that idea. They say that the U.S. isn't too worried about specific dollar/yen levels, and would only intervene if there was an exceptionally sharp fall in the U.S. currency. And with elections coming up next November, the U.S. government probably wants to avoid a weakening in the yen that would increase Japanese exports and invite the ire of American manufacturers, traders say. "The market will be eyeing the upcoming G7 meeting closely, but it is unlikely that anything will come of it," says Hikari Sekioka, vice-president of foreign exchange at Sakura Bank. Thursday Market Activity The dollar fell against the euro Thursday after the single currency appreciated on the back of a pre-holiday rally in European stocks. In late New York trading, the dollar was at 102.21 yen, up from 101.68 yen late Wednesday. The euro was trading at $1.0157, up from $1.0094 late Wednesday in New York. The dollar managed to strengthen against the yen as U.S. stocks surged, with the Nasdaq hitting the 4000 level for the first time early in the session. The trades between dollars and yen were partially depressed by the fact that the Japanese market was closed Thursday in observance of the emperor's birthday, a national holiday.