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

To: pater tenebrarum who wrote (37210)	1/11/2000 2:29:00 PM
From: Don Green	Respond to of 99985

Mr. Yen's World An interview with "liberated" ex-bureaucrat Sakakibara Eisuke Since stepping down as Japan's vice minister of finance for international affairs in July 1999, Sakakibara Eisuke arguably never left the limelight. Dubbed "Mr. Yen" for his unique influence over the currency's movements, he now heads Keio University's Global Security Research Center and is an adviser to Salomon Smith Barney, a subsidiary of financial-services giant Citigroup. The former bureaucrat seems to relish private life. Recently, he made waves by criticizing Bank of Japan governor Hayami Masaru for what Sakakibara said were ambiguous statements on monetary policy. Tokyo has touted the 58-year-old economist as a candidate to be the next International Monetary Fund (IMF) chief. Sakakibara concedes he is unlikely to win the post, but that doesn't appear to bother him. During a 90-minute interview in Hong Kong with Editor Ann M. Morrison, Assistant Managing Editor Ricardo Saludo and Senior Correspondent Alejandro Reyes, he delivered insights on Japan, Asia and the world, laughing frequently and heartily. Here is the expanded online interview: Where is the yen heading? The Japanese government is determined to stop the yen from appreciating further. There are lots of options. The yen is at about 102 [to the dollar]. Once you break 100, the rate is likely to head toward 90 or 80, and that is something that needs to be avoided at all costs. To do that, it is quite important for the Japanese government to show it is determined never to let the rate appreciate beyond 100. The way to do it is to drive the rate toward 110 with aggressive intervention, hopefully with the announcement of easing of monetary policy. That is what needs to be done and I think [Finance] Minister Miyazawa [Kiichi] and my successor Vice Minister Kuroda [Haruhiko] feel the same way with regard to the need to stop further appreciation. I have been predicting that within a month or two, the Japanese government is likely to intervene very aggressively to drive the yen toward a rate of 110. There are a couple of favorable factors that make such intervention possible. First, the market is long on the yen. Once market participants see the trend being reversed, it is likely that they will reverse their long position. They will have some cover. Another thing is that Japanese life insurance companies have sold a significant amount of dollars and euros in the futures market, and it is likely that they will modify that position in the months of January and February. There will be very strong demand for both euros and dollars from institutional investors. Given those factors, the likelihood is not small that intervention could be effective. cnn.com

To: pater tenebrarum who wrote (37210)	1/11/2000 4:42:00 PM
From: Crimson Ghost	Read Replies (3) \| Respond to of 99985

heinz: Disagree fundamentally re: bonds. The fact is that the stock market has greeted almost all bond rallies with great enthusiasm. Where do you think stocks would be today if the long bond now yielded 6% instead of nearly 6.7%. Rising bond yields are BEARISH for equities -- they just haven't risen enough yet to end the greatest stock mania of all time. I do not advocate shorting bonds here, but premature to go long except for a quick trade. The time to go long investment wise will be when the stock market buckles badly without immediately bouncing back and/or no longer rockets upward every time treasury yields drop a little. Time to go long bonds getting close, but not here yet.