Mar 30, 2001 - 01:09 PM

Yen Sinks to 30-Month Low The Associated Press

LONDON (AP) - The yen plunged to a 30-month low against the dollar Friday after a top Japanese official said the United States had considered reaching a pact with Japan to lower the yen at their summit meeting in Washington earlier this month. "A weak yen pact was discussed within the U.S. government, but it never reached the table at the U.S.-Japan summit meeting," Aso, who accompanied Prime Minister Yoshiro Mori to Washington, said Friday.

Aso was quoted by Kyodo News agency as saying Wednesday that a reference to the weak yen was deleted from the joint communique issued at the summit meeting because of U.S. concerns a weak-yen statement might imply the U.S. government approves of its ballooning trade deficit.

The news of that the U.S. considered a weak yen policy triggered a powerful dollar rally against the yen on Friday with the U.S. currency quickly breaking above the 124 and 125 yen levels.

"The yen is having a serious setback of major proportion," said Andrew Chaveriat, foreign exchange analyst at BNP Paribas. "The yen has lost more than 3.30 yen (to the dollar) over the past couple of days."

The dollar traded at 125.28 Japanese yen in late European trading, up from 123.12 yen late Thursday. Later, in New York trading, the dollar hit a high of 125.65 yen, and was quoted at 125.51 yen by midday, a level not seen since Oct. 7, 1998 when the dollar traded as high as 130.70 yen.

In other trading, the U.S. dollar was mixed against other major currencies in European trading Friday. Gold fell.

Heavy dollar versus yen buyouts also had a negative impact on the euro which continued to fall for the fourth consecutive day against the dollar on Friday.

In late European trading, the 12-country currency was quoted at 88.33 cents, up from 88.32 cents Thursday. Later, the euro fell was trading at 87.91 cents in midday trading in New York.

"The dollar's strength against the yen and Asian currencies is spilling over the euro," Chaveriat said.

Other dollar rates in Europe, compared to late Thursday, included 1.7266 Swiss francs, down from 1.7268, and 1.5734 Canadian dollars, up from 1.5710.

The British pound was quoted at $1.4233, down from $1.4370. In midday trading in New York, the pound was worth $1.4176.

Based on euro rates in Europe, the dollar is worth 2.2132 German marks, down from 2.2137; 7.4228 French francs, down from 7.4245; 2.4937 Dutch guilders, down from 2.4943; 2,191.09 Italian lire, down from 2,191.59.

Gold closed in London at $257.70, down from $259.40 on Thursday.

In Zurich the bid was $257.45, down from $259.25.

Gold dropped $1.30 in Hong Kong to $259.05.

Silver closed in London at $4.32 bid per troy ounce, down from $4.33.

AP-ES-03-30-01 1308EST © Copyright 2001 Associated Press. All rights reserved.

-- Anonymous, March 30, 2001

Answers

If you happen to be buying a Japanese car right now, doesn't the falling yen mean the dealers have more profit to play around with, that one can bargain for? (Unless the list price has been cut, not likely I would say)

-- Anonymous, March 30, 2001