I don't have time to figure out what's going wrong right now, for some reason my browsers' location lines are not showing what I expected. Here's the full details copied from #6472 on Blood is in the Streets thread:
To: Jim Willie CB (6471 )
From: goldsnow
Monday, Aug 3 1998 5:39PM ET
Reply # of 6476
Dollar Rises vs Yen on Grim EPA Japan Outlook, Asia Market Woe
Dollar Rises vs Yen on Grim EPA Outlook on Japan (Update2) (Updates
rates.)
New York, Aug. 3 (Bloomberg) -- The dollar rose for a fourth day against
the yen, approaching an eight-year high, as Japan's Economic Planning
Agency issued a grim assessment of the economy and as currencies and
stocks across Asia declined.
Taichi Sakaiya, the new head of Japan's Economic Planning Agency, said
the country's growth rate for the year ending in March will be lower
than expected, while Standard & Poor's Corp. cut the credit ratings of
four of Japan's largest life insurance companies. ''The Japanese know
they need to get their house in order, but until they do that, the
outlook for the yen remains negative,'' said Domenick Presa, chief
currency trader at Generale Bank, who said the dollar could soon return
to the eight- year high of 146.78 yen that it achieved June 16.
The U.S. currency was recently at 145.62 yen, up from 144.66 yen late
Friday in New York. Earlier it rose as high as 145.90, its highest since
June 16. The U.S. currency could rise to 150 yen by the end of the
month, said David Hughes, who manages $1 billion in bonds at Invesco
Inc.
The dollar's gains also drove it higher against the mark. It rose to
1.7857 marks from 1.7796 marks.
The yen was hurt as Sakaiya said the EPA's forecast of 1.9 percent
growth is ''unachievable.'' Growth won't be better than 0.5 percent, he
said, and the economy might even shrink by 0.5 percent this year.
Meantime, S&P lowered the credit rating on Nippon Life Insurance Co. and
three other insurers to reflect ''a deterioration in the companies'
operating environment, stemming from depressed investment conditions and
the recessed economy in Japan.''
Asia's Declines ''Very clearly the economic and financial problems in
Japan are taking center stage'' for all of Asia, said Nick Stamenkovic,
chief European economist at Baca Futures in London. ''There doesn't seem
to be an end in sight to the yen softening.''
Japan's moribund consumer demand is hurting the country's neighbors that
depend on it to buy their exports. The weakness in the yen, which has
fallen 10 percent this year, makes Japan's exports less expensive. That
too puts pressure on Japan's Asian trade competitors.
In turn, Asia's financial woes crimp demand for Japanese exports and are
souring investors on the entire region.
Currencies in the region slumped against the dollar, with the Singapore
dollar falling 0.33 percent, the Philippine peso down 0.30 percent and
the South Korean won dropping 1.01 percent.
The Hong Kong government said its economy contracted by 2.8 percent in
the first quarter, more than the 2 percent initially forecast. The Hang
Seng stock index fell 4.83 percent.
Japanese stocks also declined today, with the benchmark Nikkei 225 index
fell as much as 1.36 percent.
Chinese Concern
The yen's decline is also raising concern that China may be forced to
devalue its currency, the yuan. Today, Chinese stocks plunged in Hong
Kong on that speculation. A drop in the yuan would compound Asia's
problems, and could spark currency devaluations throughout the region as
other nations try to compete with Chinese and Japanese exports. ''You
cannot rule out devaluation of the yuan,'' said Stamenkovic.
The yen has fallen in recent days on doubts Japan's new prime minister,
Keizo Obuchi, will be able to put a swift end to the country's worst
recession since World War II. ''People are skeptical that Japan's new
government is going to be able to come through'' with changes it has
promised, said Invesco's Hughes.
Obuchi, who presents his economic policies to parliament Friday, faces
evidence Japan's slump is worsening. The economy contracted 0.7 percent
in the year ended March 31, and the government suggested Friday that it
may continue to shrink in the year through March 1999. ''The dollar will
continue to get upward momentum from concern the Obuchi government is
not taking fast enough action to deal with the problems of Japan's
economy,'' said Tom Barman, who helps oversee $31 billion in assets at
Rothschild Asset Management. ''I personally believe the government is
well aware of the concern and will in fact provide measures to reflate
the economy.''
Those expectations will eventually ''stop the dollar from continuing its
advance, but it's going to take a few more weeks,'' said Barman, who
also said he won't consider buying yen until then.
Japan Autos
In another sign of frailty in the economy, a report today showed
Japanese automakers sold fewer automobiles in July, the 16th consecutive
monthly decline. Domestic sales of cars, trucks and buses fell 8.4
percent in July from the same month a year earlier, following a 9.2
percent drop in June. ''The markets are skeptical about Obuchi providing
anything of a short-term stimulus,'' said Eric Fishwick, an
international economist at Nikko Europe in London. He expects the
sentiment towards the yen ''to be quite pessimistic for the next twelve
months.''
The yen's weakness has traditionally given Japanese exporters an
advantage over their foreign counterparts. Yet for some manufacturers,
those days may be coming to an end. Toyota Motor Corp. President Hiroshi
Okuda said any benefits in profit due to the weak yen will be offset by
declining sales at home. ''Domestic sales have fallen so much,'' that an
upward revision in earnings is unlikely, Okuda said at a press
conference.
Elsewhere, the British pound fell to $1.6271 from $1.6326. The dollar
rose to 5.9885 French francs to 5.9550, to 1.5017 Swiss francs from
1.4916 francs and to 1762.10 Italian lire from 1752.50 lire. It was
little changed at 1.5147 Canadian dollars from 1.5132.
bloomberg.com@@8Ql*OAcAQOMyhVzE/news2.cgi?T=news...
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