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 Pre=
view March 6, 7:00 PM: EUR/$..0.8766 $/JPY..130.77 GBP/$..1.4230 $/CHF..1.=
6817 Japanese Forex Trading Preview by Darko Pavlovic At 6:50 PM Japan Fe=
b foreign reserves (exp n/f prev n/a) The yen is trading at a 2 month high=
vs. the dollar, around 130.60 boosted by repatriation flows ahead of March=
31, an upgrade from Merrill Lynch and a rise in Nikkei. If the yen breaks =
below 130-which are the lows from January 7th, it could strengthen vs. the =
dollar to 129.30-129. Moody's rating agency announced that there was a high=
probability that a new review would prompt a two-notch ratings downgrade i=
n Japan's sovereign debt. Traders also wait for the release of Q4 GDP data =
from Japan on Friday. The ruling LDP party is advocating the government to =
compile new stimulus measures, as a way to help the economic recovery. Afte=
r the fall in PM Koizumi's popularity it is more obvious that the ruling co=
alition is trying to impose its decisions on they way how the government sh=
ould deal with economic problems. Economic minister Tanaka and BoJ Governor=
Hayami do not agree if inflation target should be set. Tanaka is in favor =
of inflation targeting while Hayami thinks that its impact would be very li=
mited on monetary policy. The House of Representatives passed the 81.23 tri=
llion yen budget for fiscal 2002, which begins April 1. The total amount of=
the budget fell 1.7% from fiscal 2001 and is the smallest since that for f=
iscal 1998. The budget was submitted to the Diet on Jan. 25.Ten major think=
tanks downgraded their GDP growth rate for the October-December 2001 quart=
er. The contraction in GDP forecasted by the institutions averages 1.3% bel=
ow the previous quarter, which converts into an annualized contraction rate=
of 5.2% and would mark the third straight quarter-on-quarter decline. The =
revisions were due to fall in corporate capital spending data for the same =
quarter. Japan foreign reserves rose $403.486 bln at end February up $2.609=
bln from a month earlier. A breach of 130.50 should trigger the testing of=
the trend support line, which extends from 115.75 (Sep 20) thru 119.71 (No=
v 12), at the 129.75 level. Resistance is seen at 132.50, 133.50 and 133.70=
. EUR/USD is trading around 87.65 waiting for tomorrow's rate announcement=
from the European Central Bank, even though analysts do not expect a rate =
move. Having broken the near-term resistance of 87.55, EUR/USD will eye the=
more challenging target of 88.10 cents, which is the 50% retracement of th=
e slide from the year's high of 90.63 to the year's low of 85.63. From ther=
e, the euro faces its next resistance at 88.50. Support is viewed at 87.0, =
backed by 86.65 and 86.30. The majority of economists believe that the Bo=
E will keep rates steady at 4.0%, particularly after the central bank gover=
nor Eddie George made comments with the intent of dampening market hopes fo=
r interest rate hikes later in the year. Sterling tumbled against the euro,=
though, on reports of an impending deal between the UK's Imperial Tobacco =
and Germany's Reemtsma. Cable is trading around $1.4230. Support holds at 1=
.420, 1.4170 and 1.4130. Upside capped at 1.4256, 1.4280 and 1.430. Tomorr=
ow's release of US Q4 productivity is forecasted to rise to 4.5% from the p=
revious quarter's 3.5% due to an upward revision in GDP. This is a dollar s=
upportive piece of data, though markets will still be waiting for Friday's =
labor market report for a reading on the US economy. Major data due from t=
he US this week consist of jobless claims, productivity, consumer credit, a=
nd the labor market report. Key Eurozone indicators include the ECB rate de=
cision, Italian GDP and Dutch CPI. The main data releases from the UK are h=
ousing starts and the Bank of England's rate decision. Highlights from Japa=
n comprise the MoF corporate survey, trade balance, indices of business con=
ditions, GDP, money supply and wholesale prices. =09[IMAGE] Audio Mkt. A=
nalysis USD/JPY Hits 2-month Low Articles & Ideas Will Dollar be Fue=
lled against the Euro? Euro: The Lonely Tender Articles & Ideas For=
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