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Bonds fall, dollar mixed
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July 14, 1998: 5:15 p.m. ET
Mixed emotions over Japan and Russia outweigh U.S. inflation news
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NEW YORK (CNNfn) - U.S. Treasury bonds fell Tuesday, following a mixed performance by the dollar and despite news that inflation in the country remains low.
The bond market started the day with modest gains, which were extended when news came out that the consumer price index rose a smaller-than-expected 0.1 percent in June and retail sales grew 0.1 percent, also below forecasts.
But prices quickly turned around when early gains in the dollar evaporated as investors showed optimism that Tokyo will work harder to resolve its economic problems when a new prime minister is found. Japan's current Prime Minister Ryutaro Hashimoto resigned after his Liberal Democratic Party suffered a setback in parliamentary elections over the weekend.
The benchmark 30-year Treasury bond fell 10/32 of a point in price, raising its yield to 5.71 percent.
Meanwhile the dollar managed to post modest gains against the German mark, as investors bought the cheapened U.S. currency after selling it off a day earlier. The dollar's gains against the market were limited, however, by Monday's news that Russia has secured a $22.6 billion international aid package. The news sent Moscow's financial markets rallying and reassured mark investors, who had been worried about Germany's large exposure to Russia.
The dollar closed at 139.93 yen, down from 141.08 at the start of U.S. trading. The greenback finished at 1.8047 marks, up slightly from 1.8025 at the open. 
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