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To: Giraffe who wrote (10384)	4/22/1998 9:18:00 AM
From: Lalit Jain	Respond to of 116764

Giraffe, This may be good for gold. Mr. Yen to sell dollars? Key finance official jokes that Japan can sell Treasury bills 'anytime' April 22, 1998: 8:50 a.m. ET TOKYO (Reuters) - Influential finance bureaucrat Eisuke Sakakibara hinted on Wednesday that Japan stood ready to sell U.S. Treasury bonds to raise intervention funds, a comment seen as a sign of Tokyo's growing frustration with the markets. Sakakibara, Japan's vice finance minister for international affairs, told reporters after a symposium that Japan had ample cash reserves to intervene in the currency market. Asked about the possibility of selling U.S. Treasurys to fund currency intervention, Sakakibara said jokingly: "Well, you know, we can sell them anytime." Japan is the largest single international holder of U.S. Treasury securities, with about 25 percent of U.S. debt. Sakakibara also said it was important to convince the world that Japanese assets were a "buy" and added that he believed the U.S. stock market would "peak out," although he did not give a specific time frame. Sakakibara's comments gradually pushed the dollar down by nearly one yen from its Wednesday high, bringing dollar/yen to 130.65/70 in early European trade. The U.S. Treasurys market had shown little reaction to the comment by late Tokyo trading. Many Tokyo traders said Sakakibara's comments reflected his displeasure and irritation at the currency exchange market's reluctance to push up the yen despite favorable comment from the Group of Seven (G7) which welcomed Japan's steps to stimulate demand and correct an excessively weak yen. "The way he (Sakakibara) spoke today was strong and he seemed quite unhappy (with the yen's recent falls)," said Kazunori Iida, dealing section manager at Nissho Iwai Corp. "But a top official like him should not have mentioned it." The dollar rose decisively above 130 yen after last week's G7 meeting and has remained well-bid since then. The Bank of Japan had intervened heavily ahead of the meeting, selling dollars for yen in New York on April 9 and the next day in Tokyo, to hammer the U.S. currency down to about 127.40 yen. Iida said it was natural that dollar-selling intervention by Japan would lead to some sales of U.S. Treasurys. But bond dealers said that the comment by Sakakibara was not as shocking as remarks by Prime Minister Ryutaro Hashimoto last June that rocked U.S. financial markets. At the time, Hashimoto said that Japan had in the past been tempted to sell its holdings of U.S. Treasury securities and boost its gold reserves, but had not done so. The comment was taken by U.S. markets as a veiled threat by Hashimoto to sell off Japan's Treasury holdings, sending shockwaves through global markets. Sakakibara's comment this time was not expected to undermine the basic sentiment in the Treasury market, but traders said there is a need to monitor the market closely following widespread talk last week that the Bank of Japan had sold about $12 billion in T-bills. Markets will have another chance to tune into to Sakakibara -- known as "Mr. Yen" for his influence on currency markets -- on Thursday, when he speaks again at another symposium, specifically on the subject of the dollar/yen rate. "We cannot completely ignore his comments, but I don't think that this will be a major factor to trigger major sales in the Treasury market," said Kouki Muroi, deputy manager of financial markets trading division at Nippon Credit Bank. cnnfn.com