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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (24138)	2/23/2005 1:01:41 AM
From: RealMuLan	Respond to of 116555

Banks of Japan, Korea, come to rescue of U.S. dollar -------------------------------------------------------------------------------- Big News Network.com Tuesday 22nd February, 2005 The relentless selling of the U.S. dollar may let up following moves by the Banks of Japan and Korea Wednesday. The dollar has been declining for the past three years and is now near record lows against the euro. Wednesday the Bank of Japan issued a statement saying the bank, the largest holder of U.S. treasuries in the world, had no plans whatever to sell the U.S. Dollar. The Bank of Korea also announced it had no plans to sell the dollar. Concern arose in foreign exchange markets on Tuesday following news that the Bank of Korea had advised lawmakers it was diversifying out of U.S. dollars. The bank said Wednesday its plans were not new and they did not mean the bank was going to sell the dollar. The significant news though was the signal from the Bank of Japan that it would not sell the U.S. currency. Japan has an inherent interest in a strong dollar due to the significant holdings it has, and its well known policy of supporting the dollar to stabilize the yen. The bank has repeatedly warned in recent weeks that it was not happy with the high yen exchange rate and would take appropriate action if necessary. Significant too with the Bank of Japan announcement was that it co-incided with a report released Wednesday indicating exports had slowed sharply in January. The high exchange rate is believed to have been a major factor. Japanese policymakers are concerned that deteriorating exports will worsen the economy which has already moved back into recession after stagnating for the past decade. feeds.bignewsnetwork.com