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To: lorne who wrote (3620)	11/27/1997 8:44:00 PM
From: CuriousGeorge	Read Replies (1) \| Respond to of 116822

But CNN said Japan's fundamentals are good! latimes.com Japan Appeals for Calm, Vows Bank System Is Stable Asia: Officials try to stem early signs of public panic, as some savers withdraw money. Banks' funding costs surge. Japan on Wednesday made an extraordinary appeal for calm among the public and financial markets over the country's economic crisis. A rare joint statement by Finance Minister Hiroshi Mitsuzuka and Bank of Japan Gov. Yasuo Matsushita also promised there are no more major bankruptcies ahead for Japanese financial institutions. Meanwhile, the "premium" that Japanese banks are forced to pay other world banks to borrow short-term funds continued to rise today, underscoring the world market's deep suspicions about the Japanese financial system's prognosis. In a sign of how the closures of four financial institutions, including two in the last three days, have rattled the Japanese public, the statement from the government and the central bank said people were withdrawing their deposits from banks. The officials urged the public to have faith in Japan's financial system. "We strongly urge the public not to pay heed to irresponsible rumors and to act calmly," the statement said. "We will provide funds smoothly and without hesitation so that repayment of financial firms' deposits and other payments will not be hindered." Asked why the ministry and central bank decided to issue a statement, Mitsuzuka said: "Fund-raising difficulties were detected in short-term money markets because of groundless rumors, so we decided to issue the statement." The statement was issued as Mitsuzuka canceled plans to attend a meeting of Southeast Asian finance ministers in Malaysia next month and Eisuke Sakakibara, a vice minister known as "Mr. Yen" for his influence in currency markets, canceled a trip to Hong Kong, where Asian currency traders will gather this weekend. Mitsuzuka and Sakakibara acted after the government allowed the collapse on Wednesday morning of a small regional bank, Tokuyo City Bank, two days after giant brokerage Yamaichi Securities began liquidation procedures. In world money markets early today, the Japan premium--the extra cost to Japanese banks of raising funds in the eurodollar interbank market, a major funding arena--widened to 0.94 percentage point for three-month loans, forcing Japanese banks to pay about 6.7% for money that American banks pay 5.8% to borrow. The widening of the premium, which was as low as 0.20 point two weeks ago, reflects growing pessimism about Japan's financial sector after credit-rating agency Moody's Investor Service said Wednesday that it had placed the credit ratings of five Japanese banks under review for possible downgrades. The five banks are Long Term Credit Bank of Japan, Nippon Credit Bank, Mitsui Trust & Banking, Yasuda Trust & Banking and Chuo Trust & Banking. Bank of Japan's recent massive infusion of funds into Japan's money market to give banks liquidity was not enough to temper the market's pessimism, traders said. Still, Japan's stock market managed to rally early today, with the Nikkei-225 index up 2.5% to 16,441 by late morning. The market had gained 1.1% on Wednesday after plunging more than 5% Tuesday. Meanwhile today, Japan said its merchandise trade surplus for the first 10 days of November rose 6.2% from the same period a year ago, as exporters boosted shipments to the U.S. and Europe to offset slower demand in Asia. The country's trade surplus--the value of all goods passing through Japanese ports--stood at $1.68 billion for the period, the Finance Ministry said. Exports grew 5.4%, while imports increased 5.2%. Japan's surplus expanded 185% in the first 10 days of October and 140% for the full month from a year earlier. Manufacturers are exporting more to the U.S. and Europe to offset a slowdown in sales of big-ticket items, such as automobiles and electronics, following a series of tax increases this year. Exports to the U.S. are offsetting declines of exports to Asia following the devaluation of several Southeast Asian currencies. Still, Japan's overall surplus will continue to grow as long as demand in the U.S. and Europe remains strong, economists said.

To: lorne who wrote (3620)	11/27/1997 9:39:00 PM
From: lorne	Read Replies (1) \| Respond to of 116822

This looks like some deflation and some inflation at same time. BN 11/27 Top Stories From Major Korean Morning Newspapers, Nov. 28 Seoul, Nov. 28 (Bloomberg) -- The following stories appeared in major South Korean newspaper this morning: Korea Employers to Cut Workers by As Much As 30% Next Year The Korea Employers Federation, representing executives of the nation's leading conglomerates, will cut as much as 30 percent of their employees next year to deal with the slack economy. The federation will ask the government early next month to change laws to make it easier for employees to be laid off. (Seoul Economic Daily) Oil Refinery Companies to Raise Gasoline Prices to 923 Won Per Liter SK Corp., the nation's largest oil refinery company, and other four oil refining companies, said they will raise gasoline prices by 81 won or about 9.7 percent to 923 won per liter today to compensate for the higher cost of imported crude oil from the won's weakening. Prices of kerosene and diesel will also increase 83 won per liter, or 22 percent on average to 458 won and 457 won, respectively. The Trade, Industry and Energy said the government has no plan to use the country's energy funds that it had set aside to cushion impacts on soaring crude oil prices. The government is expected to let gasoline prices exceed 1,000 won per liter in January next year. (Chosun Ilbo)