U.S. Market January 10, 2001

Yesterdays Asian high 117.20 could not stand up under the orderly selling pressure in New York generated by its 17 month high and, though it rebounded from session lows, the currency pair still closed half a yen from its New York peak at 116.50. The rally in usd/yen has been brewing for many months as the Japanese economy slips, once again, into a trough, but this time without a burning American export market to give it even the semblance of recovery. A late European comment by a Japanese official inferring that Japan would tolerate a weaker yen only served to underline the unchanging economic thought of the current Tokyo government. Eur/usd faded for the third straight day, but this correction will do little to alter the up-trend which took it to a 6-month high against the usd and 10-month summit against the yen last week.

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