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To: Lalit Jain who wrote (15256)	8/4/1998 4:10:00 AM
From: Alex	Respond to of 116764

Hi Lalit................ Japan traders doubt forex intervention imminent By Tamawa Kadoya TOKYO, Aug 4 (Reuters) - Markets are sceptical if monetary authorities will intervene to buy yen soon, since the currency has yet to reach a point where its weakness would trigger a global market meltdown, analysts and currency traders say. Another decisive factor in whether an intervention would work is whether the United States would join in the effort to stem the yen's slide, they said. ''I don't expect intervention to occur for a while...sole intervention by the Bank of Japan will not have much impact, and the U.S. will likely want to see the details of Japan's (economic stimulus) efforts,'' a dealer at a U.S. bank said. But chances of a yen-buying intervention may increase after Japan produces concrete plans to fix its ailing economy, traders said. ''Intervention by the Bank of Japan cannot be completely ruled out after Prime Minister (Keizo) Obuchi delivers his policy speech (to parliament on Friday),'' the dealer added. On Tuesday, Obuchi's new cabinet ministers went on a verbal offensive to protect the yen. Clarifying earlier comments which had prompted the dollar to gain almost five yen since last week, Finance Minister Kiichi Miyazawa said he never intended to indicate he was ruling out market interventions. ''It is unavoidable to correct market distortions in order to promote the orderly (workings of) the market economy,'' Miyazawa told a regular news conference. In an inaugural news conference last week after Obuchi's new cabinet was announced, Miyazawa had said the yen and stock prices should basically be left to the markets, although he said at the time that interventions were acceptable in ''extreme cases,'' such as the Japan-U.S. joint yen-buying operation on June 17. ''My statements may have been insufficient or sent the wrong message,'' Miyazawa told the news conference. ''It was not my intention to say that interventions are unnecessary.'' Trade Minister Kaoru Yosano and Economic Planning Agency chief Taichi Sakaiya also joined the chorus on conducting intervention when needed. But the dollar's nearly two yen tumble from an earlier high of above 146 yen on Tuesday stemmed largely from position adjustments rather than a genuine fear of intervention, dealers said. A Japanese city bank dealer said: ''The basic undertone is still bullish, but the dollar has been overbought recently. It was about time to see some corrective sales.'' But others warned that the MOF's stance should not be taken lightly. ''I think the market is underestimating the possibility of intervention...I wouldn't be surprised if it occurred anytime soon,'' said Takao Sakoh, senior adviser in the foreign exchange department at UBS AG. ''The MOF has said it will take decisive action if the yen becomes excessively weak,'' he added. Sakoh added that Obuchi ''has no choice'' but to implement stimulative steps to bolster the economy, and with the U.S. economy clearly peaking out, he expects the dollar to come down to near 130 yen ''around autumn.'' Meanwhile, traders do not see the United States taking part in a joint intervention effort as authorities would not want to see the dollar weakening at a time when Wall Street remains vulnerable. ''Further dollar weakness in the face of weak stocks would put a negative spin on things, so the U.S. is unlikely to agree on intervention,'' a bank dealer said. No threats of a devaluation of China's yuan have yet been made by Chinese officials, despite the fact that both the Hang Seng index and Chinese stocks on the Hong Kong stock exchange have suffered in recent days, said Tim Moloney, a currency strategist at Deutsche Bank. ''In terms of shaping perceptions of the risks of intervention, comments of U.S. and Chinese officials will be the most crucial,'' he said. biz.yahoo.com