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

To: pater tenebrarum who wrote (36112)	12/28/1999 7:53:00 PM
From: Don Green	Respond to of 99985

Market Basics: Yen To Stay Firm Against Dollar In Early 2000 Wednesday, December 29, 1999 TOKYO (Nikkei)--The dollar will remain weak against the yen early next year, trading between 97 and 104 yen through January, predicts Hideki Yomo at Tokai Bank. Yomo says that the Japanese currency will probably receive a boost from renewed buying of Japanese shares by overseas investors. He also cites a large surplus of dollars on the global market as a reason for the expected weakness of the U.S. currency. Any appreciation of the yen, however, will not be sharp, Yomo contends, because a rise above the critical 100-yen level will move the Ministry of Finance and the Bank of Japan to intervene in the foreign exchange market to prop up the dollar. January is the month when overseas investors generally formulate their investment strategies for the new year, Yomo points out. Because there has been concern that U.S. share prices are overpriced, he expects that overseas investors will opt to put their money into yen-denominated assets. One of the major market focuses in the near term will be the meeting of finance officials from the Group of Seven industrialized nations, slated to be held in Tokyo in early January, he says. He anticipates that G-7 finance ministers and central bankers will agree to take some action to stop the yen from rising further. However, he rules out a concerted market intervention. Yomo asserts that a rising tide in favor of protectionism has been emerging in the U.S., as reflected in the turmoil surrounding the ministerial meeting of the World Trade Organization held in early December in Seattle. This will make it risky to count on the U.S. to help Japan ease off the yen's strength, he explains. (The Nikkei Financial Daily Wednesday edition)