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To: Chip McVickar who wrote (1797)	4/13/1998 11:33:00 AM
From: Henry Volquardsen	Respond to of 3335

Off Topic Hi Chip, hope you have been well. It may be a bit early to cede victory to the Bank of Japan. They spent an extraordinary amount of reserves on Friday, estimates were as high as $15 billion, in a thin market with the US and Europe closed for Good Friday. For all this effort they only a couple of yen in strength. The BoJ has been fighting a war of words since late last year to keep the yen strong. Their concern is that when currency restrictions were eased for Japanese investors on April 1 that there would be significant outflows over the balance of the year. They need to keep the funds at home to prevent spiraling deflationary pressures. They announced yet another economic stimulus package and the market yawned. The intervention last week was another effort to maintain the illusion of a strong yen. I think the BoJ is spitting in the wind. Until the government comes up with a credible stimulus package that generates domestic growth sufficient to allow Japanese interest rates to rise to international levels, I find it difficult to construct an argument for anything but short term yen strength. Henry