YEN SEEN RISING AFTER G-7 COMMUNIQUE
  The yen is likely to start another
  uneven rise against the dollar and other major currencies
  because the Group of Seven communique contained nothing new,
  currency and bond analysts here said.
      "Is that it? I was expecting something more than that," said
  one trader at a major Wall Street securities company.
      Marc Cohen of Republic National Bank of New York said: "The
  market now has the impetus to drive the dollar lower again."
      The dollar hovered between 145.50 and 147 yen in the days
  just before the talks. Dealers restrained their underlying
  bearishness and squared positions ahead of Wednesday's meeting
  of the finance ministers and central bankers of the top seven
  industrialized nations in Washington.
      After more than four hours of talks, the G-7 issued a
  communique which merely reaffirmed the recent Paris agreement's
  view that prevailing currency levels were broadly consistent
  with economic fundamentals and that exchange rate stability
  should be fostered around these levels.
      The dollar sank to 144.75 yen in early Tokyo trading.
      "They said that the dollar/yen rate was broadly in line with
  fundamentals when it was 154. Now they are saying it's in line
  when it's at 146. Will this still be so at 138 or 130?," asked
  Republic's Cohen.
      Japanese Finance Minister Kiichi Miyazawa fuelled
  speculation about the amount of fluctuation the authorities are
  prepared to tolerate by saying that the current yen level is
  still inside the range agreed on in Paris in late February.
      Official statements in recent weeks had indicated that the
  key psychological level of 150 yen was at the lower end of the
  authorities' permissible range.
      Dealers and analysts warned that the dollar's decline would
  probably be uneven. They anticipated a concerted effort to prop
  up the dollar and restrain the yen via a mixture of open market
  intervention and public comments.
      Shortly after the Tokyo market opened today the Bank of
  Japan was detected by local dealers buying moderate amounts of
  dollars. The dollar rebounded to about 145.20 yen.
      The sources said the market may also be wary of agressively
  selling dollars for yen before Tuesday's February U.S. Trade
  data. The figures are expected to show a deficit of 13 billion
  dlrs, from a provisional 14.8 billion in January.
  
  
  
  
  

