Dollar Continues to Climb Against Yen But Forecasters Believe Its Top Is Near
AuthorAffiliation Staff Reporter of The Wall Street Journal</br></br>"A still weaker yen would prompt foreign investors to accelerate their sell-off of Japanese securities, and a weaker yen would further hurt U.S. industrial competitiveness."</br></br>And it isn't just the dollar's climb against the yen that they expect to stall. Paul Meggyesi, a senior currency strategist at Deutsche Morgan Grenfell in London, contends that pessimism about the German economy is overdone and estimates that during the next month or so the dollar will creep only a little higher to 1.58 or 1.59 marks. And while he acknowledges that the yen is the pariah currency at the moment, he says that "we are entering the final quarter of the Japanese fiscal year when capital flows tend to be unpredictable."</br></br>Stephen Lewis, chief economist at London Bond Broking Co., a division of Monument Derivatives Ltd., doubts the dollar will climb to 120 yen, 3.2% above current levels. Looking ahead to the Feb. 8 meeting of finance ministers and central bankers from the world's seven major industrial powers, he says fears that the Group of Seven will resort to concerted intervention to stabilize currencies "will be enough to prevent any sharp moves between now and then."</br></br>Late in New York trading yesterday, the dollar stood at 116.40 yen and 1.5776 marks, up from 115.75 yen and 1.5744 marks late Wednesday. The pound rose to $1.6961 from $1.6880 a day earlier. In Tokyo early Friday, the dollar was trading at 116.43 yen and at 1.5764 marks.