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It may be the first day of a new fiscal year for Japan, but it looks depressingly similar to the last one.

While the first quarter came to a close in the U.S. last Friday, the Japanese fiscal year ended with its stock markets falling, its economy in near shambles and its currency valued at levels not seen in years.

Though the new year should come with a chance to start fresh, the yen is continuing last year's trends. The Japanese

tankan report

, a survey of business confidence reported a sharp downturn this morning, along with dismal forecasts for future capital spending. The release of the report caused the yen to slip to fresh 30-month lows against the dollar.

But since the tankan, commentary out of Japan has raised a bit of rarely seen hope for the yen, causing traders to question whether international authorities will stand for further devaluation of the ailing currency. Japanese Finance Minister

Kiichi Miyazawa

started the public speaking overnight, indicating that the recent drop in the yen happened at too fast a pace.

While Miyazawa planted the seeds of hope for intervention into the currency markets,

Bank of Japan


Masaru Hayami

watered them by commenting afterward that he expects the yen to recover. The yen rebounded a bit from the day's lows, as the dollar was recently trading for 126.32 yen per dollar, up just barely from its close last Friday of 126.25 yen.

The yen is expected to devalue further this week, as Japanese corporations who repatriated funds for accounting purposes ahead of the fiscal year-end, reverse the process and begin a yen selloff to start the new year.

The euro, meanwhile, has been trading in a very tight range against the yen this morning, little affected in either direction by the tankan report or the commentary out of Japan. The euro was trading recently for 110.80 yen per euro, up just minimally from last week's close of 110.72 yen.

The spillover from the dollar's strength earlier against the yen raised it higher against the euro, hitting new 3 1/2 month highs. But as the dollar fell back against the yen, it did the same vs. the euro. The euro was most recently trading for $0.8770, down marginally from $0.8774 at its last close Friday.

As of the early morning in New York, the net effect has been an almost negligible change between the three major currencies at the start of a new week, new U.S. fiscal quarter, and new Japanese fiscal year.

The dollar's early strength has carried over into its trading against the second circle of major currency players, as it ascends to new highs against other members of the dollar bloc.

The Australian dollar was forced down to fresh all-time lows against the U.S. currency this morning, as the dollar's strength kicked the already weakened Aussie buck when it was down. The Aussie currency has largely devalued in recent weeks as the global economic slowdown has spread to the land down under. The Australian dollar was priced most recently against the U.S. dollar at $0.4835, up a little from the new lows, but down from last week's close of $0.4851.

The Canadian dollar also felt the brunt of the U.S. dollar's upward momentum as it slid to new 2 1/2 year lows this morning. The U.S. dollar was trading recently for C$1.5728, off the day's highs as it slid generally across the board, and down from last week's close of C$1.5759.

The British pound was trading on the dollar, priced at $1.4192, up just a bit from $1.4156 at its last close.