Japanese Preview

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Interest Rates US: Japan: Eurozone: UK: Switzerland: 1.75% 0.15% 3.=
25% 4.0% 1.25-2.25% [IMAGE] =09 [IMAGE] Japanese Forex Trading=
Preview January 10, 7:00 PM: EUR/$..0.8920 $/JPY..132.12 GBP/$..1.4391 $/C=
HF..1.6607 Japanese Forex Trading Preview by Darko Pavlovic At 6:50:00 P=
M Japan Dec Bank Lending (exp n/f, prev n/a) Japan Dec WPI (exp n/f, prev n=
/a) Japan Dec Money Supply (exp n/f, prev n/a) The yen rose vs. the dollar=
for the first time in four days after Japanese Finance Minister Shiokawa w=
arned that the yen's fall is a little too rapid and US National Associati=
on of Manufactures complained the weakening Japanese currency hurt their ex=
ports. Furthermore, the manufacturers' group declared its desire to meet wi=
th the US Treasury next week to discuss the dollar's strength, since they b=
elieve it is hindering an economic recovery. The yen's depreciation has rai=
sed objections from other Asian nations concerned it will hurt growth by cr=
imping their exports. December domestic wholesale price index remained unch=
anged from last month. The index is down 1.4% from a y/y for the 15th conse=
cutive month of year on year decline. December M2+CD rose 3.4% from a year=
earlier.Prime Minister Koizumi also added to the brouhaha about the yen's =
exchange rate by saying that Japan was not deliberately weakening the yen, =
but instead, markets were determining what was an appropriate level. In res=
ponse, Malaysian PM Mahathir said he was watching with interest the impact =
of the yen's fall on the Chinese yuan and ASEAN currencies. Koizumi is curr=
ently visiting Southeast Asia and is likely to encounter scrutiny from regi=
onal trading partners who are undoubtedly wondering how low the yen will dr=
op and thus hurt their export competitiveness, and whether it would spark a=
round of devaluations. Ex-Japanese Minister of Finance Sakakibara, known a=
s Mr. Yen, also said in the previous Asian session that he expect the yen m=
ight fall to 150-160 per dollar towards year-end. However, Sakakibara warne=
d of possible intervention if the dollar rises above the psychological leve=
l of 140 yen. In reference to Bank of Japan policy, Sakakibara said the ban=
k should keep easy monetary policy including more JGB purchases, but warned=
that excessive government spending would be ineffective and could lead to =
a collapse in the JGB market. Support is viewed at 132.0, 131.50 and 131.0.=
Resistance is eyed at 132.70, 133.0 and 133.40. The euro is trading arou=
nd 89.10 after German industrial production came weaker than expected but d=
id not move the single currency considerable. Industrial production fell be=
low forecasts to -1.6% in November from the previous month's -1.2%, or to -=
4.8% y/y in November from the previous -3.2%. Economists fear that weakness=
in Germany could weigh on Eurozone GDP, which was revised to 1.4% in Q3 fr=
om the previous 1.3%. However, growth in Q4 could tumble to 0%, thereby put=
ting pressure on the European Central Bank to cut interest rates in Februar=
y to spur an economic recovery in the European region. Support is seen at 8=
9.0, backed by 88.80 and 88.60. Upside capped at 89.55, 89.80 and 90.0. Th=
is week's remaining US indicator is PPI, which is forecasted to rise to -0.=
2% in December from the previous -0.6% but remain below zero for the third =
straight month as energy and food prices continue to decline. Core PPI is p=
rojected to edge down to 0.1% in December from 0.2% in November, in a refle=
ction of how overall inflationary pressures remain mild. Markets will p=
ay careful attention to Fed Chairman Greenspan's speech tomorrow for any me=
ntion about the US outlook, as it will be his first speech on the economy s=
ince last October. Highlights from Japan consist of wholesale prices, money=
supply and the ESRI Tokyo consumer sentiment survey. =09[IMAGE] Audio =
Mkt. Analysis BoE inaction Lifts GBP, Comments Hurt CHF Articles & I=
deas A Weak Yen Is the Solution for Now What's Next For the Euro? =
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