DOLLAR CLOSES LOWER IN TOKYO
The dollar closed lower on selling by
speculators and by institutional investors hedging currency
risks, dealers said.
    But the dollar's downward potential was limited by
persistent Bank of Japan intervention throughout the day.
    Some dealers started to sell dollars on speculation that
the Group of Seven meeting expected tomorrow in Washington is
unlikely to produce any significant new measures to stabilize
currencies, some dealers said.
    The dollar closed at 145.25 yen against 145.85/90 in New
York and 146.00 at the close here yesterday.
    The dollar ended at 1.8205/15 marks against 1.8260/70 in
New York.
    "The market consensus is that the G-7 meeting is unlikely to
change present underlying bearish sentiment for the dollar and
is likely just to reaffirm the February 22 Paris accord on
currency stability," a manager at a Japanese bank said.
    The dollar decline seem to come to a halt near 145.00 yen
after the Tokyo closing on shortcovering as many operators seem
unwilling to hold large positions ahead of the G-7 meeting,
some dealers said.
    The dollar ended at 1.8205/15 marks against 1.8260/70 in
New York.
    +The market consensus is that a G-7 meeting is unlikely to
change the underlying bearish sentiment for the dollar and is
likely just to reaffirm the February 22 Paris accord on
currency stability,+ a manager at a Japanese bank said.
    The dollar decline seemed to halt near 145.00 yen after the
Tokyo close on shortcovering, as many operators seem unwilling
to hold large positions ahead of the expected G-7 meeting, some
dealers said.
    The market is closely watching for a probable meeting
between U.S. Treasury Secretary James Baker and Japanese
Finance Minister Kiichi Miyazawa later today ahead of the G-7
meeting, dealers said.
    Some dealers said mere reaffirmation of the Paris accord
would fail to stop the dollar's decline against the yen unless
the U.S. And Japan make progress in resolving trade and other
economic friction.
    Japan is expected to explain to the U.S. The guidelines of
the ruling Liberal Democratic Party's economic package to
stimulate domestic demand, a senior party official said.
    Operators generally see the dollar as still likely to head
downwards, probably sliding as low as 140.00 yen, despite the
G-7 meeting, dealers said.
    The dollar ended at 1.5130/35 Swiss francs against
1.5180/90 in New York and sterling finished at 1.6205/15 dlrs
against 1.6175/85.
    The firm tone of the pound is expected to remain for the
time being due to bullish sentiment, mainly on speculation the
ruling Conservative Party would retain power in expected
general elections, although the Bank of England may intervene
in the market, some dealers said.
    The Bank of Japan stepped into the market soon after the
opening and continued to intervene in the market to buy dollars
on a small-lot basis all day, dealers said.
    The mark/yen cross rate fell to 79.76 yen from 80.08 at the
close here yesterday.
    Spot dollar/yen volume through brokers was 6.56 billion
dlrs with a most actively traded rate of 145.55 yen compared
with 146.10 here yesterday.
 REUTER
