SUMITA SEES REAGAN BONDS FEASIBLE, SAYS NEWSPAPER
Bank of Japan Governor Satoshi Sumita said
he would support the issuance of Reagan bonds, yen-denominated
U.S. Government securities, if it was considered appropriate, a
Japanese daily paper reported.
    The Sankei Shimbun quoted Sumita as saying in an interview
"It (Reagan bond) is a very feasible idea," speaking in the
context of the effectiveness of such bonds in halting the
dollar's decline.
    Asked how he would respond to the idea if it were brought
up at any Group of Five meeting in Washington later this week,
the paper quoted him as saying "I will back it up."
    But Sumita said the market still has confidence in the
dollar, and one must be careful in associating the current
dollar decline with anything like a free fall, the paper said.
    In 1978, the administration of then president Jimmy Carter
floated government securities worth four billion dlrs in marks
and Swiss francs to try to halt the the dollar's depreciation.
    A Bank of Japan spokesman confirmed that the newspaper
report was basically correct.
    But a senior central bank official told Reuters that as far
as he knew, the idea was not being seriously considered now,
either in the U.S. Or in Japan.
 REUTER
