Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (2473)	6/28/2000 8:07:00 AM
From: John Pitera	Respond to of 33421

will Moody's drop a bomb on Japan and us at some point? Tokyo appeals to Moody's on rating By Gillian Tett in Tokyo Published: June 27 2000 17:33GMT \| Last Updated: June 27 2000 18:56GMT Kiichi Miyazawa, Japan's finance minister, on Tuesday appealed to Moody's, the US credit rating agency, to refrain from downgrading Japan's debt in the aftermath of Sunday's election. Mr Miyazawa, speaking in Tokyo, called on Moody's to "think" and "not do something which it might regret". His comments came as the yen weakened against the dollar amid rumours that Moody's was considering downgrading Japan's debt for a second time, after cutting the rating from the top notch "triple A" level 18 months ago. Moody's, which refused to comment on the rumours, started a review of Japan's debt slightly over four months ago. It warned Tokyo then that it might downgrade the debt if the government did not show convincing signs that it was producing a credible policy to tackle the rising debt. Japan's debt levels were 123 per cent of gross domestic product last year and are expected to rise to 130 per cent this year, one of the highest figures in the industrialised world. Country reviews by Moody's usually take three to four months. However, Moody's recently suggested that this could be extended to six months, suggesting the conclusion of its review is likely to emerge this summer. The government of Yoshiro Mori, prime minister, which won the largest number of seats in Sunday's, election, has not yet formally indicated details about the economic policies it plans to pursue this year. However, Mr Mori is widely expected to press ahead with the same policies that the ruling Liberal Democratic party was implementing before the vote. This would entail more fiscal stimulus in the coming year and no attempt to cut the debt until there are clear signs that the economy is recovering, probably in 2002. Some sections of the LDP are unhappy with this stance. The Ministry of Finance has warned that the debt levels appear to be rising to unsustainable levels. However, Sunday's vote reduced the number of LDP seats, meaning that the LDP can only control the lower house through a coalition that it has formed with New Komeito and the New Conservatives. New Komeito is understood to be particularly opposed to any attempt to implement early fiscal consolidation. If Moody's does downgrade Japan's debt, it would deliver a deep blow to the pride of the Japanese government. However, since foreign investors only hold 5 per cent of Japanese government bonds, Moody's previous downgrade had a limited impact on markets.

To: John Pitera who wrote (2473)	6/28/2000 8:20:00 AM
From: John Pitera	Respond to of 33421

we have further talk of higher rates to come in euro land and interestingly 4 secondary currencies under attack this weak, the Korean Won, the Mexican Peso. phil. peso and the indian Rupee if these 4 brew into anything, it will be the first time in almost 2 years that I recall so many little currency "brush fires" ----Speaking to Market News International former vice minister Sakakibara said the MOF will likely order the BOJ to intervene in the event the yen strengthens much further. He went on to say that zero rates did not represent a moral hazard and that it would be a mistake to raise them given lingering deflationary forces and no evidence of improved private sector consumption. In Europe, the ECB?s chief economist Issing, interviewed in the German weekly magazine Focus warned that import price rises posed an inflationary risk and that the ECB stood ready to act. In the wake of today?s 2% rise in German import prices the odds favour a further escalation in the repo towards 4.75% by year end. Elsewhere, the Korean won fell in reacting to a deterioration in the current account in the wake of reduced investor inflows. The Philippine Peso fell on fears the US will raise rates. The central bank Monday cut its deposit rate 1.5% to 8.5% unwinding three previous rate increases and adding to confusion over policy direction. The Indian Rupee fell on fears foreign investors will dry up leading to a potential weakening further on in the year. ------