Newspaper article THE JOURNAL RECORD

Efforts Increase to Halt Dollar Rise

Newspaper article THE JOURNAL RECORD

Efforts Increase to Halt Dollar Rise

Article excerpt

NEW YORK (AP) - The government boosted its efforts to stem the dollar's rise against the Japanese yen from February through April, but by the end of the quarter it was market sentiment that actually stopped the climb, the Federal Reserve said Thursday.

The Fed and the U.S. Treasury sold $1.78 million in the three months ended April 30, nearly 90 percent of it to buy yen, the Fed said in its quarterly foreign exchange report. The remaining $200 million was used to buy West German marks.

In the previous three months, October through January, the government spent $750 million intervening in currency markets, all of it to buy yen.

Although purchases more than doubled in the latest quarter, it was ``far, far lower than the earlier three-month period last year,'' Sam Y. Cross, a Fed executive vice president who released the report at a press conference.

The government's purchases last year included a record $11.92 billion in yen and marks during the three months ended July 31 and $5.871 billion in the following three months.

The dollar rose 10 percent against the yen during the February-April period this year while declining by less than 0.5 percent against the mark.

The dollar saw its steepest climb of the period against the yen from late February through early April. The climb subsided as the market awaited the April 7 meeting of financial officials from governments of the so-called Group of Seven leading industrial nations, the Fed said.

Also, in April, the market came to view the Bank of Japan's 1 percent increase in its discount rate as sufficient to lessen downward pressure on the yen. Then, the Japanese stock and bond markets began to recoup some of their losses, according to the report. …

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