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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (7894)	9/11/1998 2:55:00 PM
From: MGV	Read Replies (2) \| Respond to of 22640

Japan remains an issue but in a less immediate way. The relationship between Japan and Brazil from the perception angle all along has been currency risk. The uncertainty was whether the Yen's devaluation would catalyze a speculative attack on Brazil. Now that a speculative attack has happened (notwithstanding the Yen's recent strength), Brazil's ability to fend it off takes center stage. If it can, then the Japanese linkage will have been weakened somewhat because Brazil will have shown that it can withstand a severe attack. Nevertheless, until Japan fixes its structural problems the Yen will be subject to attack and by extension will add to emerging market uncertainty. In sum, the events of the last week has accelerated th ecurrency risk in Brazil and preempted the Japanese concern. If that is not clear, let me know.