Japan threatens huge dollar sell-off

[Tinoire]

Japan threatens huge dollar sell-off

Heather Stewart in Tokyo
Sunday December 5, 2004
The Observer

Japan is warning the White House that there will be 'enormous capital flight' from the dollar if the Bush administration maintains its laissez-faire approach to the mounting currency crisis.
Tokyo fears that Japan's strongest economic recovery in a decade could be derailed by the sudden appreciation in the yen against the greenback.

(snip)

The criticism of President Bush's inaction, by a senior member of the ruling Liberal Democratic Party, will be taken as a veiled threat that Japan could start to sell off its multi-billion-dollar holdings of US Treasuries. 'The Japanese government is going to ask for a strong dollar policy; if it continues to fall, there would be enormous capital flight from the dollar,' said Kaoru Yosano, chairman of the LDP's policy council, adding that Japan would be calling on its fellow G7 governments to demand the US deal with the massive fiscal deficit that has helped to prompt the dollar's decline.

Yosano's remarks echoed a warning from a senior Japanese Ministry of Finance official that if the US does not push up interest rates to make the dollar more attractive, 'the one-way sentiment on the dollar will have a negative impact on the flow of capital into the US.' He added that Japan is urging its European counterparts to join a campaign of coordinated currency-market intervention, saying: 'If the dollar is depreciating, we should have coordinated action: that has already been communicated to my European counterparts.'

Like Japan, the eurozone fears that its tentative recovery could be choked off by the fall in the dollar, which European Central Bank president Jean-Claude Trichet has called 'brutal'. However, the ECB has so far dismissed the idea of intervening.

(snip)

http://observer.guardian.co.uk/business/story/0,6903,1366578,00.html

[NMDemDist2]

1. and so it begins eh? n/t

[catzies]

2. Just the thing for the Monday morning opening the trading Xmas week

doncha think?

[whirlygigspin]

5. hello kitty

whole lotta shakin goin on, ha.

can you say bust?

[eleny]

3. When will Snow leave to spend more time with the family?

[lovuian]

4. In other words the World is going to STOP BUSH if we

can't!!!

[whirlygigspin]

6. Japan is just wasting its money trying to hold back this bust cycle

lalalalala.

[Wilber_Stool]

7. I'm no economist

but i've been waiting for this. Why buy a dollar today when it will only be worth $.95 in two weeks.

[bahrbearian]

8. This isn't "LBN" IT"S DATED Dec 5th 2004

[Yuugal]

9. as the dollar goes lower in value....

doesnt the value of our debt go down? 8 trillion isn't that much money if it can only buy you a taco.

[Art_from_Ark]

10. This article is bullshit

Japan wants a strong dollar. The bu$h misadministration wants a weak dollar. So, the writer is trying to say that Japan is threatening to DUMP massive amounts of dollars, which would make the dollar even weaker, and wreak havoc for Japan's export industries???

As one who has been closely connected with Yen-dollar trends since the Reagan years, I say this article is a ten-gallon hat full of PURE CRAP.

[maddezmom]

11. not Late Breaking News, locking