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To: Glenn D. Rudolph who wrote (96560)	3/15/2000 6:15:00 PM
From: GST	Respond to of 164684

FOREX-Yen shrugs off Bank of Japan intervention (Recasts, updates with latest market action, prices) By Genevieve Wilkinson NEW YORK, March 15 (Reuters) - The yen fell on Wednesday after the Bank of Japan intervened to curb its strength, but optimism about Japan's economy kept losses to a minimum. The euro, meanwhile, held a neutral stance against the dollar as the market braced for a possible interest rate hike by the European Central Bank on Thursday. The dollar shot more than 1 percent higher against the yen in Asian trading to a peak of 106.20 yen after the BoJ intervened and Finance Minister Kiichi Miyazawa warned that more intervention could lie ahead to brake the yen's rise. But momentum rapidly faded and the yen pushed higher to settle around 105.65 per dollar in late U.S. trade, less than half a yen away from the previous day's close. ``Obviously, the market is a little skeptical of the bank of Japan,' said Rick Gomes, managing director of foreign exchange at HSBC in New York. ``There has been a pretty steady capital inflow into Japan. There seems to be growing positive sentiment, so the BoJ seems to be fighting (that).' The yen has made strong gains in recent weeks as the market has grown bullish about the prospect Japan will pull out of recession and amid a repatriation of Japanese capital ahead of Japan's fiscal year end on March 31. But although dealers voiced doubts that intervention would have a lasting impact, they stopped short of testing the BoJ's will. Officials in Tokyo have expressed concerns that a strong yen will hurt exporters, denting prospects for a recovery from recession. ``We don't seem to have much of an interest to pick a fight,' said Grant Wilson, vice president at Mellon Bank. The BoJ's intervention pushed the euro to a peak of 103.25 yen, well above its all-time floor of 100.52 set on Tuesday, before the euro slipped back to trade virtually unchanged from the previous close around 101.75 yen. The euro was largely subdued against the dollar ahead of the ECB meeting on Thursday and major U.S. inflation reports on Thursday and Friday, which could influence rate decisions by the Federal Reserve next week. Speculation has mounted that the ECB could raise its 3.25 percent refinancing rate as soon as Thursday, but analysts say that prospect was unlikely to give the euro much of a boost. ``A rate hike is already priced into the market,' said Ben Strauss, vice president at bank Julius Baer. Analysts say a euro zone rate hike could be countered if the U.S. Federal Reserve also introduces a quarter-point rate hike when its Federal Open Market Committee meets on March 21. The euro initially pushed to an intraday high of 97.11 cents in New York, but was unable to generate enough energy to break out of its recent range and slipped back below 97 cents. The dollar largely shrugged off reports showing U.S. industrial production grew more slowly than expected in February and that the U.S. current account deficit -- the trade gap -- widened to a record level in the fourth quarter. The Commerce Department said the deficit swelled 12 percent to $99.78 billion in the fourth quarter, surpassing the previous record set in the third quarter. While gaping current account and trade deficits are a potential weight on the dollar as Americans send more money abroad to pay for imports than they receive in exports, the dollar has held up as foreigners have invested in U.S. asset markets.