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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: borb who wrote (991)	5/11/1998 10:19:00 PM
From: chirodoc	Read Replies (1) \| Respond to of 3902

<<<<<"The year of 2000 is for Asia" ......conservative economists (free marketers) were not saying that. they were saying that japan would be crushed under regulation--they were right and those predicted the demise of capitalism are being scorned from office, unieversities, and think tanks. basically they blew it. David DeRosa: Gloom and Doom for Mr. Yen By David DeRosa Special to TheStreet.com 5/11/98 4:06 PM ET Japan's capital flow data came out today, and the numbers are huge. About 3 trillion yen (roughly $23 billion) went flying out the door in April -- compared with a paltry 7.8 billion yen the previous month. Nightmare time for Mr. Yen. The foreign exchange law was changed April 1, and the result hasn't exactly been trivial. The breakdown of the numbers shows that Japanese investors bought 2.84 trillion yen worth of foreign securities in April while foreign investors sold about 250 billion yen of Japanese stock and bonds. So who did all this buying? Who has that power? Life insurers (973 billion yen), banks (718 billion yen) and trust banks (544 billion yen) -- that's who. And I might add that these figures are for foreign bonds, only. Part of this orgy of foreign asset buying has to do with the serious weirdness that accompanies every fiscal year-end in Japan. To count a profit on a trade, you have to actually sell the security. So some portion of the securities that the Japanese institutions bought in April just replaced the ones they sold in March. But that is only part of the story because the overall figure for capital outflow was, as mentioned, only 7.8 billion in March. Now that is interesting. Very interesting indeed. Maybe now we know why senior ministers like Sakakibara are so crazed on topics like the level of the yen and short-term interest rates. Maybe we also know why they staged the futile attempt to strengthen the yen last month. In fact the approximate size of the Good Friday intervention in dollar/yen was thought to be a little over $20 billion, which just happens be close in size to the aforementioned $23 billion capital outflow. And ever since, certain LDP party members have been spouting off about the need to raise short-term rates. It might also explain some of the inflammatory remarks that Sakakibara made about the U.S. markets having peaked. In other words, the guy is looking more and more like Hans Brinker every day.