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To: Abner Hosmer who wrote (8116)	3/7/1998 3:03:00 AM
From: Abner Hosmer	Respond to of 116764

biz.yahoo.com >>JAKARTA, March 6 (Reuters) - Indonesia said on Friday it would subsidise the import of food and other essentials as the rupiah slipped and the United States pressed Jakarta to implement economic reforms... ..The spokesman said the government would make available dollars for the importers of wheat flour, sugar and soybeans at a fixed rate of 5,000 rupiah to the dollar. He gave no further details. While the move would technically violate Indonesia's agreement with the IMF, the agency is likely to take a lenient view, economic analysts said... ..''It's a question of how long they can afford to do it,'' said Chiang Yao Chye, Head of Asia Pacific Research at CIBC in Singapore. ''Without additional aid from international sources we will have to see how this can be done. I don't see it being sustainable in the longer term.''<<

To: Abner Hosmer who wrote (8116)	3/7/1998 4:06:00 PM
From: Alex	Read Replies (2) \| Respond to of 116764

Hi Tom. Euro to have big impact on U. S.......................... canoe2.canoe.ca

To: Abner Hosmer who wrote (8116)	3/9/1998 8:11:00 PM
From: goldsnow	Respond to of 116764

Asian turmoil spurs deflation fears in Japan 04:55 a.m. Mar 09, 1998 Eastern By Miki Shimogori TOKYO, March 9 (Reuters) - Asia's economic turmoil is intensifying worries in Japan over excessive price falls, or deflation, which analysts say could jeopardise the nation's efforts to jack up its stagnant economy. They said weakened demand in troubled Southeast Asian countries, Japan's key trading partners, has already spurred global price falls especially of raw materials, eating into Japanese corporate profits. Excessive price falls could deal a blow to the already troubled Japanese corporate sector, which is seeing its first falls in profits in four years this business year amid a stagnant domestic economy, analysts warn. ''Deflationary pressure here is not that huge at present, but it may gain momentum in the latter half of this year,'' said Masaki Shiroyama, a senior analyst at Nikko Research Center. Shiroyama said prices were falling at the moment due chiefly to withered demand in Asian nations. He said the situation would get worse in the latter half of 1998, when Asian manufacturers are expected to boost exports to take advantage of increased price competitiveness due to weakened Asian currencies. Asked if Japan could weather the situation, he said: ''It's all up to whether and how the domestic economy will regain its strength and absorb the possible impact.'' Analysts said recent falls in some items such as steel, chemical products and memory chips stemmed from the Asian economic and currency turmoil which erupted last summer. In February, for instance, Japan's import prices took a steep dive of 8.4 percent, the biggest year-on-year drop since May 1994, on weakening product prices overseas and the yen's relative strength against other major currencies, the Bank of Japan (BOJ) announced on Monday. The fall in prices of imports pushed Japan's overall wholesale price index (WPI) down 0.1 percent in February from a year earlier, marking its first drop since September 1996. ''The fall in import prices can be seen as a sign (of deflation),'' said Nobuchika Ishida, an economist at Sanwa Research Institute Corp, adding that overall WPI was likely to fall two percent in the business year starting on April 1. Ishida warned that price conditions could be worse than in 1995, when Japan was gripped by concerns over a ''deflationary spiral,'' or a vicious circle in which an excessive price fall bites into corporate profits, then cuts household spending, which in turn erodes profits further. Given recent year-on-year increases in labour costs, any price falls in products would hurt corporate revenues more than they did in 1995, Ishida said. But he said price falls from the Asian turmoil alone would be largely limited to raw materials, and this of itself would not cause any widespread damage to corporate profits. ''What worries me is the price falls resulting from declines in the domestic economy,'' Ishida said. The Industrial Bank of Japan warned in a report last week that deflationary concerns were intensifying in Japan. ''The downtrend in domestic prices will intensify after April in the face of falling prices in the international product market, the inflow of cheap Asian exports, as well as a widening gap in supply and demand conditions in the domestic market,'' the bank said in the report. While hurting corporate profits, price declines, combined with falls in asset prices, would increase companies' outstanding debt, prolonging time needed for their balance sheet adjustment, it said. ''In order to wipe out deflationary concerns hanging over the Japanese economy, it is indispensable for Japan to seek yet another economic (stimulus) measure,'' IBJ said. IBJ said deflationary risks could be avoided if Japan adopted two trillion yen ($15.6 billion) worth of special tax cuts and additional public spending of three trillion yen, which the bank said would push up the nation's gross domestic product by one percentage point. ((Tokyo Equities Desk +81-3 3432 9404