Japanese Preview

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Interest Rates US: Japan: Eurozone: UK: Switzerland: 2.5% 0.15% 3.7=
5% 4.5% 1.75-2.75% [IMAGE] =09 [IMAGE] Japanese Forex Trading Prev=
iew October 17, 7:00 PM: EUR/$..0.9026 $/JPY..121.25 GBP/$..1.4460 $/CHF..=
1.6404 Japanese Forex Trading Preview by Darko Pavlovic At 1:00:00 AM Jap=
an August Coincident Ind Rev (exp n/a, prev 0.0) The single currency fell =
for the sixth day in seven against the dollar, hitting a session low of $0.=
9013, after the ECB's Chief Economist Issing said that dampen the markets e=
xpectation of another rate cut on October 25. Issing said that the Central =
Bank should focus on restraining inflation and the ECB President Duisenberg=
, in a separate statement said that controlling inflation remain bank's ma=
in focus . Overall market sentiment was not improved by Fed Chairman Greens=
pan's testimony to Congress indicating the US economy faced weakness. The W=
hite House's Lindsey said today the US will probably see "small negative" G=
DP in Q3, therefore making it likely the US economy will have 2 quarters of=
negative GDP and officially be in a state of recession. Further fueling ma=
rket concern about the US economic outlook that sent the stocks lower were =
confirmation that 31 of Senator Daschle's staff tested positive for anthrax=
exposure and a new possible case of anthrax contamination of New York Gove=
rnor Pataki's Manhattan offices. Eurozone HICP fell to 2.5% y/y in Septembe=
r from the previous 2.7%, drawing near the ECB's 2.0% interest rate target.=
The single currency can continue to weaken vs. the dollar after Friday's I=
fo business climate index, which is expected to decline to a new 5-year low=
of 88.1 from the previous 89.5. A weak Ifo reading will renew the pressure=
on the ECB to cut rates to address falling demand, and should the ECB choo=
se to prioritize price stability over growth, the euro will likely suffer a=
s a result. Upside capped at 90.65, 90.90 and 91.25. Support stands at 90.1=
0, 89.90 and 89.60. The dollar eased vs. the yen trading around 121.25, af=
ter reaching overnight levels of 121. 79 just a bit off its one month high =
reached on Tuesday, amid markets speculation that Japanese authorities woul=
d once again attempt to depreciate their currency by buying foreign assets.=
Finance Minister Shiokawa stated his desire the Bank of Japan would halt a=
protracted decline in prices by continuing its monetary policy easing. Shi=
okawa's comments followed those from Bank of Japan governor Hayami who said=
it was inappropriate for Japan to set a target on providing liquidity and =
that monetary easing would have little impact while Japan's structural prob=
lems remained. President Bush urged Japan to accelerate its economic reform=
package, including disposal of bad loans. Shiokawa said that 30 tlrn yen b=
ond issuance cap may not apply to war on terrorism. Shiokawa added that he =
is still not sure how much money Japan will need to help the US led militar=
y campaign against Afghanistan. Asia Pacific Economic Cooperation Forum dec=
ided to start in November the next round of multilateral talks under the WT=
O. Resistance is seen at 121.80, 122.0 and 122.50. Support at 121.0, 120.50=
and 120.15. US stocks plummeted on new cases of anthrax, shrugging off t=
he upward momentum generated by positive earnings reports from IBM and Inte=
l. Dow plunged by 1.6% or 151 points to 9232 and NASDAQ fell by 4.4% or 75 =
points to 1646 in its largest daily drop since April 23. Major economic dat=
a due this week from the US include the Philadelphia Fed Survey, CPI and in=
ternational trade. Economists in a recent Reuters survey expected the Phila=
delphia Fed Survey due for release tomorrow to plummet to -15.3 in October =
from -7.3 in September, corroborating the dire straits of the manufacturing=
sector which has contracted for 10 straight months by remaining below the =
zero level. In a separate Reuters poll, economists predicted that Friday's =
release of CPI will reflect the rise in oil prices and climb to 0.3% in Sep=
tember from the previous 0.1%. Most economists believe that inflationary pr=
essures remain subdued because of the economic slowdown. Mild inflation wil=
l allow the Federal Reserve to continue to ease monetary policy to address =
the US contraction that likely worsened after the September 11 attacks. Key=
indicators from the Eurozone are the ECB monthly bulletin and Germany's IF=
O business climate survey. From the UK, markets await economic data this we=
ek including money supply, balance of trade and retail sales. =09[IMAGE]=
Audio Mkt. Analysis Euro Closes Below 90.50 Despite New Anthrax Cases =
Articles & Ideas EURO: German IFO Will Remind ECB to Build Growth Dol=
lar Comeback Stopped by Risk of Terrorism Articles & Ideas Forex Glos=
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