TOKYO-- Most Japanese currency traders started the week slowly. Some were still stuck on trains trying to get back to Tokyo after the long holiday, while others were nursing hangovers. All were prepared to start the week, month, year, century and millennium noshing on leftovers from their New Year's parties, occasionally checking their trading screens and scribbling appointments in their brand-new, but empty calendars.
Ministry of Finance
bureaucrats, on the other hand, weren't gently easing into the work routine on Jan. 4, the first business day of 2000 for Japan. They had big plans. Plans to stop the yen's ascent. Plans to scare all those snacking currency traders. It was as if Vice-Finance Minister for International Affairs
had penciled, nay penned, in the words "conduct forex intervention" in his pocket calendar.
Under instructions from the MOF, the
Bank of Japan
spent about $1.5 billion to weaken a yen that was inching ever higher against the dollar. To some observers, it seemed like an odd time for an intervention. To others, the timing was uncanny. Those traders at the office (and not stuffing their faces) figured it was just another "smoothing" operation. Kuroda did his best to disabuse them of that view.
"We will move boldly, on our own or in concert with others, depending on the situation," Kuroda told the
Nihon Keizai Shimbun
, the country's leading business daily.
By Thursday, the bureaucrats had pushed the yen to a seven-week low against the greenback, making companies like
very happy. The dollars it earns selling you a
, after all, now bought more yen.
Although they helped push the currency down the stairs, bureaucrats alone were not the only reason for the yen's fall. Weak economic numbers, including bank lending and industrial production, prompted some traders to ponder whether Japan's economy, widely thought to be in throes of recovery, might not be as robust as anticipated.
The droop in the yen was also exacerbated by U.S. hedge funds, which reportedly sold the Japanese currency to cover losses on Tokyo high-tech shares, which tumbled along with America's
. Many investors are said to be favoring the euro over the yen, a dynamic that ultimately boosts the greenback.
With all that, analysts now forecast that the dollar may rise to 110 yen by Jan. 22, when
Group of Seven
finance ministers and central bank governors meet. Their deputies meet this weekend in Tokyo.
Indonesian officials have the opposite problem. They would like to see the rupiah, which is still in the midst of a protracted recovery from the 1997 Southeast Asian currency crisis, rise. But a bungling of finances at the central bank may prevent that. A state audit showed that
was in the red for about a year after handing out about $7 billion to weak banks after the Asian financial crisis.
suggested ousting central bank governor
, and investors are now speculating that the bank's woes could be the tip of the iceberg and additional debt-laden agencies and private firms could surface.
Investors are likely wondering how long it will take before the president's new calendar will start filling up with appointments to meet with
International Monetary Fund