To: John Pitera who wrote (3824 ) 4/27/2001 1:39:20 PM From: John Pitera Respond to a 79 year old Finance Minister for Japan.... yea.. that's the ticket -g- surrounding the choice of 79-year old and relatively unknown Masajuro Shiokawa as finance minister, things got even worse as the day wore on. Shiokawa did garner some respect as he said that the yen's exchange rate should be determined by the market . However, given the deteriorating fundamentals in the Japanese economy, with further deflationary pressure expected from Koizumi's reformist mentality, nonchalance on the part of officialdom gave the market the green light to take the currency lower. Of course, the IMF's Mussa suggested that a weaker yen would not be so bad with the BoJ trying to counteract some of the deflationary pressures with its recent quantitative easing. Such comments helped to take dollar/yen to an eight-day high of Y123.56, though the dollar did not fare as well as against the euro, as selling pressure failed to materialize following the as-expected decision by the ECB to leave rates unchanged. While the economic deterioration in the eurozone (which has been easily evidenced by plunging confidence at both the corporate and consumer level) is expected to draw more criticism towards the ECB, the central bank does have more of a cushion with the heightened inflation pressures in the region. German producer prices rose a higher than expected 4.9% year on year, while consumer prices rose a higher than expected 0.3% in the month to mid-April, up 2.8% year on year. Euro strength provided some support for the Swiss franc, while sterling eased a tad from its firmer tone as of late. Some of the best gains on the day were seen South of the border. The Mexican peso lived up to its title as the best performing currency of the year, finding support from some reprieve in Argentina, as well as the Senate's passage of a bill that provides self-rule for Indian groups, and is seen as a major initial victory for the new Fox Administration. The Brazilian real also reversed its five-session losing streak as Argentine Economy Minister called talk of a bond default "ludicrous". Latin American markets were also encouraged by talk of a possible bond swap in Argentina that would extend maturities, easing the government's near-term debt burden.
