Dollar Slides Further Against Yen Despite Japan's Expected Rate Cut
Despite mounting indications there will be a cut in Japanese interest rates, the U.S. dollar continued its slide against the yen for the fifth consecutive trading day.</br></br>Lower Japanese interest rates would make yen-denominated investment less attractive, and hence would tend to weaken the currency. But that logic is being overtaken by bearish sentiment toward the dollar that was most recently encouraged by Japanese monetary officials Friday. The officials, from the Ministry of Finance and the Bank of Japan, indicated that the Japanese economy could accept a dollar valued at 190 yen.</br></br>"That was like a green light to push the dollar down," said Lawrence L. Kreicher, vice president of Irving Trust Co., New York. Mr. Kreicher said Monday's drop in the dollar was "a carryover" from Friday's sell-off of the U.S. currency based on the remarks of the Japanese officials.</br></br>In late New York trading yesterday, the dollar fell a further 0.7% against the yen, to 195.03 yen. Friday the dollar plunged 2.5%, to 196.50 yen.</br></br>In early trading in Tokyo Tuesday, the dollar rose against the Japanese currency to 195.30 yen from 195.03 in New York yesterday afternoon.