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To: JPR who wrote (65871)	9/17/1998 9:24:00 AM
From: D.J.Smyth	Respond to of 176387

08:14 DJS Dollar Tumbles Against Yen, Mark, Other Major Currencies 08:14 DJS Dollar Tumbles Against Yen, Mark, Other Major Currencies NEW YORK -(Dow Jones)- The dollar was sharply lower against the yen Thursday morning, as the Japanese currency strengthened on optimism that Japan's two main political parties will agree to a solution for the troubled Long-Term Credit Bank of Japan (LTCB) and pass much-needed banking legislation. Against the mark, the dollar also fell sharply amid persistent expectations for a cut in U.S. interest rates, despite no clear signals from Federal Reserve Board Chairman Alan Greenspan. Shortly before 9 a.m. EDT, the dollar was quoted at 132.93 yen, down sharply from 135.16 yen late Wednesday in New York. The dollar also was quoted at 1.6799 marks, down from 1.6935 marks in New York Wednesday. Meanwhile, the British pound was quoted at $1.6895, up sharply from $1.6785 late Wednesday in New York as traders turned to the United Kingdom currency as a "safe haven" amid the dollar's weakness. The dollar dropped against the yen on reports that Japan's ruling Liberal Democratic Party and the main opposition Democratic Party of Japan had tentatively agreed to temporarily nationalize troubled LTCB as part of negotiations over revising financial-stabilization bills. In addition, the failure of Tokyo's Nikkei stock index to remain above the key 14,000 level made Japanese corporations more anxious to repatriate their overseas profits, which involves sales of dollars, ahead of the half-year end on Sept. 30. The Nikkei index tumbled more than 2% to 13859.14 Thursday to a new 12-year closing low as traders continued to fret about the Japanese economy, despite the chances for compromise banking reform bills. European stock markets plummeted in the wake of Tokyo's losses. Traders continued to go over Fed Chairman Greenspan's testimony Wednesday to the House Banking Committee for clues to the timing of any possible cut in interest rates. Although Greenspan testified that there isn't any coordinated global effort to reduce interest rates, contrary to indications given by the Group of Seven leading industrial nations Monday, he did indicate the U.S. economy is slowing. Greenspan said: "there are really the first signs of erosion at the edges of the economy, especially in manufacturing." That prompted dealers to sell the dollar. Many traders see a cut in U.S. rates before the end of the year, particularly if the world financial crisis worsens. "There is a chance they might sneak one before the end of the year. To move sooner, the financial situation will really have to get worse," said Pat Magill, head of corporate trade at Daiwa Europe Bank. The dollar showed little reaction to Thursday morning's data showing the the U.S. trade deficit widened to $13.9 billion in July from a revised $13.64 billion in June - a narrower widening than expected by economists. "In general this seems to me that the worst is over in terms of how fast the deficit is widening," said Henry Willmore, senior economist at Barclays Capital in New York. Economists has expected the deficit to widen more for July as the impact of the downturn in Asian economies hit the U.S. "The negative effect of the Asia is not going to be as bad as we thought," Willmore said. "It looks like we are starting to see this borne out." obviously, it takes a real man to sell. that must mean the Japanese are real men, just like the samurai of old. suicide is always an option. it takes a real man to kill oneself, or one's market.