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To: SJS who wrote (3699)	10/4/1998 1:07:00 PM
From: Lucretius	Respond to of 14427

as I was saying... the dollar leads this mkt DOWN Sunday October 4, 1:16 am Eastern Time (Note: this article is ''in progress''; there will likely be an update soon.) Dollar seen under pressure after G7 meeting By Chikafumi Hodo TOKYO, Oct 4 (Reuters) - The dollar is expected to come under increasing downward pressure against the yen after the United States and Japan expressed concerns about the excessive weakness of the yen, Tokyo dealers said on Sunday. The Group of Seven (G7) industrialised nations said it was of ''critical importance'' to Asia and the rest of the world for Japan to take ''swift and effective'' action in solving its debt-ridden banking sector and economic problems. While the statement, following the G7 meeting in Washington on Saturday, made no mention of the yen's level, dealers are expected to focus on remarks by U.S. and Japanese officials as well as a deteriorating sentiment towards the U.S. currency, dealers said. ''It's enough to weigh on the dollar after the United States and Japan expressed their concerns about the yen's weakness,'' said Jun Yamashita, manager at Sakura Bank. ''Such an agreement between the United States and Japan was expected, but having confirmed it now, the dollar's gains will be limited,'' Yamashita said. Both the United States and Japan said on Saturday ahead of the G7 meeting that they agreed to continue cooperating in foreign exchange markets ''as appropriate.'' The G7 nations pledged at their meeting on Saturday to cooperate in the foreign exchange market as appropriate and warned that Japan's economic challenges had ''intensified significantly in recent months.'' Continuing problems in Japan's financial sector and the ailing economy may keep the yen under pressure. But at the same time, the market was not expected to build up dollar positions with more evidence of the U.S. economy slowing down. The U.S. Labor Department reported on Friday that non-farm payrolls grew by just 69,000 in September, compared with economists' expectations of a gain closer to 200,000. In addition, the jobs data showed an uptick in the unemployment rate to 4.6 percent. ''In a trend where further credit easing is likely to take place in the United States, I would not be surprised to see the dollar drop towards 120 yen,'' said Michihisa Tanimoto, foreign bond & forex section manager at Sumitomo Life Insurance. The U.S. Federal Reserve cut the key discount rate by a quarter point last Tuesday. The market is also still not sure of how to measure the magnitude of problems of hedge funds following the rescue of Long-Term Capital Management, dealers said. Worries of further hedge fund problems may be another drag on the U.S. currency in the longer term, they said. ''Worries over hedge funds still remain intact, which could be negative for the dollar in the long run,'' Sakura's Yamashita said. In the near term, traders expect Japanese institutional investors to buy dollars around 133 yen, while the U.S. currency is expected to be capped around 137 yen. (Note: this article is ''in progress''; there will likely be an update soon.)