24 December 2001, 11:49  : Christmas spirit drowns markets, yen draws support

Major currencies were predictably steady on Monday with many markets taking partial or full breaks for the Christmas holiday and the rest seeing liquidity decline to a trickle.
The yen -- the big mover in the currency markets in recent weeks -- was quoted near three year lows to the dollar around 129.47 while the single European currency stood near session lows just under $0.89 .
In very quiet trading, the yen got some support when Japanese trade minister Takeo Hiranuma was quoted as saying that a weaker yen had "positive and negative" aspects for the economy and that it was not desirable to see the currency fall further.
"It is the speed of the decline Japan absolutely detests and Hiranuma's comments slowed the yen's decline," said Matthew van Dyckhoff, foreign exchange sales manager at Brown Brothers Harriman.
"We expect a pullback towards 126.50-127 before the yen continues to fall further. But the market is not sure how far the yen can fall. Beyond 135, it's a no-man's land."
The latest developments in Argentina had no noticeable impact on the major currencies.
Argentina on Sunday swore in an interim president, Adolfo Rodriguez Saa, who immediately suspended payments on some of the country's $132 billion debt, effectively heralding the biggest debt default in history.
Apart from Canada, which is scheduled to report real gross domestic product figures at 1330 GMT, there are no economic indicator releases due from major economies on Monday.

The yen has been falling across the board in recent weeks, hitting three-year lows around 129.70 to the dollar on Friday and two-year lows around 116.65 to the euro.
Since the start of December, the Japanese currency has fallen by about six full yen against the dollar as one bearish indicator followed another, highlighting a deepening slide into deflation and recession.
More recently a string of Japanese officials signalled they were unperturbed about the yen's losses.
Hiranuma's comments were, therefore, taken as something of a surprise.
"A weaker yen has both positive and negative aspects for the Japanese economy, but it is not very desirable for it to go further from here," he was quoted by Jiji news agency as telling reporters after a cabinet meeting.

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