13 December 2002, 10:46  Forex - Yen returns to pre-Tankan levels midafternoon Tokyo after gains

The yen returned to levels seen before the Bank of Japan's survey of business conditions by midafternoon after initially getting a boost from the strong headline survey figure, dealers said. "We need to wait to see a positive outcome," said Ryohei Muramatsu, head of Commerzbank group treasury in Asia. Economists are hoping the economy will pick up on export growth as the US recovers from the second quarter of next year.
The headline index of business conditions at large manufacturers came in at minus 9, from minus 14 in the previous survey, while at non-manufacturers, it was minus 16, from minus 13 previously, the BoJ said. Economists had forecast the manufacturers index survey would come in at minus 14, with forecasts ranging between minus 11 and minus 18, and the large non-manufacturers at minus 13, within a range of minus 10 to minus 16. However, underlying survey data showed the export-led recovery is peaking, while conditions at non-manufacturers weakened further. Currency players are focused on US data, given recent eratic indicators, particularly on consumer confidence figures, due tonight. "Some figures are positive but some are negative so there is no clear trend. No one's sure how the economy will be, especially now the most important thing is consumer confidence at Christmas time," Muramatsu said. The BoJ will hold its two-day policy-board meeting at the start of next week, with its decision scheduled for Tuesday, though investors expect the bank to keep its policy on hold. "I don't expect anything. There's no reason to ease further," Muramatsu said.///www.ananova.com

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