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To: GST who wrote (135809)	12/14/2001 9:38:27 PM
From: H James Morris	Respond to of 164684

>>and don't ever forget it. I won't, that's why I'm long on the swiss franc as a hedge. Other than the Swiss airlines bailout its bullet prove. siliconinvestor.com

To: GST who wrote (135809)	12/14/2001 10:39:20 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Yup. >>NEW YORK (Reuters) - The yen was sent reeling to a three-year low against the dollar and two-year nadir versus the euro on Friday as investors grabbed hold of the idea that Japan's grim economic outlook will force a change in policies that result in a weaker currency. Analysts saw growing momentum for a falling yen, with Japan mired in its fourth recession in 10 years, interest rates virtually at zero and deflation taking hold. Most believe Japanese authorities would like to weaken the yen to boost the economy through cheaper exports. Speculation has raged that the Bank of Japan may adopt a policy of foreign bond buying to drive the yen lower at its policy board meeting next week. But the yen's slide was halted after Finance Minister Masajuro Shiokawa said the pace of the decline was too fast, while an unnamed Ministry of Finance official said action would be taken if the yen rapidly weakens or strengthens. ``When you get your finance minister stating that the correction in the yen has essentially just started, you catch the idea of a shift of where they think the yen should be,'' said David Durrant, chief currency strategist at Bank Julius Baer in New York. Durrant and other analysts see the yen shifting its range against the dollar, in the medium term, to the high 120's to the low 130's from the 117 yen to 124 yen range of the past nine months. In New York trading hours, the yen stabilized. In late dealings, the dollar traded at 127.30 yen(JPY-), a gain of 1 percent, but below the three year high of 127.95 yen. The euro climbed as to a two-year high of 115.49 yen(EURJPY-) before settling back to 115.11 yen, a gain of 2.34 percent. Sterling shot to a 2-1/2 year high against the yen, hitting 185.73 yen(GBPJPY-), before settling back near 185.18 yen, a gain of 1.60 percent. Analysts said the market has run with the idea that Japan would like the yen weaker. ``The reality is the defense of the yen has been so soft,'' said Rob Podorefsky, fixed income strategist at Fleet Global Markets in Boston. ``For the first time in the last week or so, being at this new level we have been able to test the bank of Japan's resolve....It almost looks like we are getting the greenlight to sell the yen,'' Podorefsky said. The latest signal that the Japanese authorities are content to see the yen depreciate came from Japanese finance ministry official Zembei Mizoguchi, who said the recent slide in the yen reflected a correction of the yen's strength in the summer. Earlier in the week the U.S. Treasury denied reports from hedge fund adviser Medley Global Advisors that a senior White House official had told Japanese officials it was not targeting a dollar/yen exchange rate and supported the foreign bond purchases proposal. On Thursday, White House economic adviser, Glenn Hubbard echoed Treasury, saying the Medley report does not represent the administration's position of foreign exchange policy. Further adding to the yen's misery was more bad news about the Japanese economy. On Friday a report showed bankruptcies in Japan hit their fifth-highest post-war level in November. ``Japan is in a deflationary spiral. That is the fastest way to destroy an economy and basically one of the last levers they can pull to help the economy is to weaken the currency to try and create inflation,'' said Durrant EURO SURGES The euro's powerful rally against the yen led to strength against the dollar. The euro climbed 1.32 percent to 90.41 cents(EUR-), just below a six week high of 90.54 cents. ``I think we are seeing flows out of the yen that have for technical reasons gone to the euro but will eventually find their way back to the dollar,'' said Lara Rhame, U.S. economist at Brown Brothers Harriman. The dollar was broadly weaker, falling 1.6280 Swiss francs, down 1.44 percent, while sterling gained nearly 1 percent against the greenback to $1.4544. The dollar fell to C$1.56, down 0.57 percent against the Canadian dollar. Investors shrugged off U.S. data showing the core Consumer Price Index in November was unchanged and a much larger than expected liquidation of inventories in October. Industrial production, fell a less-than-expected 0.3 percent last month.