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To: Lee who wrote (25763)	12/19/1997 11:39:00 AM
From: Franco Battista	Respond to of 176387

I beleive the correct statement should be that they are selling US dollars. I am assuming that they are selling bonds in order to be able to sell the dollars. This may be a wrong assumption. I also heard that European buyers are buying US bonds and there is money leaving the US equity markets and entering the bond markets. Here is the article about BOJ selling US dollars. Japan markets drop again Dollar-yen steady despite BOJ intervention Fri Dec 19 09:56:24 1997 TOKYO (AP) -- Edgy investors jolted by another major corporate bankruptcy Friday sent Tokyo stock prices spiraling to their lowest level in more than a month. The dollar rose slightly against the yen despite the third day of market intervention by the Bank of Japan to steady its currency. The 225-issue Nikkei Stock Average sank 846.75 points, or 5.24 percent, to 15,314.89 points, the index's lowest level since Nov. 14 and its third-largest single day point decline of the year. On Thursday, the average lost 379.42 points, or 2.29 percent. Prices plunged from the opening bell in reaction to the failure of Toshoku Ltd., a major Japanese foodstuffs trading company. Toshoku announced Thursday it had filed for protection from creditors after piling up debts totaling $5.04 billion. It was the ninth listed Japanese company to fail this year. "I think many people are throwing in the towel in regard to recovery of corporate profits in Japan," said Andrew Shipley, an economist at Schroders Japan. Asia's other major markets followed Tokyo's lead and closed sharply lower. Hong Kong's Hang Seng index fell 347.8, or 3.2%, to 10,406.32. European markets also felt the pressure, and markets in Germany, France and England remained in the red since the opening bell. Frankfurt's DAX index dropped 81.49 points, or 1.96 percent, to close at 4084.75. London and Paris markets were also off 2 percent in midday trading. Friday's morning session decline of 923.58 points topped the year's worst full-day drop of 884.11 points, or 5.29 percent, recorded on Nov. 19. On the foreign exchange market, few prospects for an early economic recovery in Japan, combined with the stock plunge, held down demand for the Japanese currency despite efforts to prop it up through intervention by the Bank of Japan. At late afternoon, the dollar was trading at 128.58 yen, up 1.24 yen from late Thursday in Tokyo and but below its late New York rate of 128.72 yen overnight. Trades ranged between 128.20-129.85 yen. Bankers said the total amount of the BOJ's dollar sales Friday could exceed the estimated $3 billion sold for yen Wednesday, when the central bank carried out dollar-selling intervention against the yen for the first time since August 1992. The central bank was also detected selling dollars Thursday, although the amount was believed to be small, traders said. U.S. Treasury Secretary Robert Rubin said the United States supported Japan's action. "The actions taken by the Japanese authorities in the exchange markets are appropriate. We share the concerns they have expressed about the yen," he said in a statement. Other traders said the sell-off would not be enough to solve the problem of the languishing currency. The yield on the benchmark No. 182 10-year Japanese government bond rose to 1.635 percent on Friday, up from 1.625 percent one day earlier. This drove its price down to 109.37 yen from 109.45 yen.