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Yen dip does little for bonds
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July 27, 1998: 9:22 a.m. ET
Japan takes a look at PM-to-be Obuchi, but U.S. bonds market hesitant
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NEW YORK (CNNfn) - A drop in the Japanese yen overnight wasn't enough to raise bond prices early Monday, as concerns that a stock rebound may be nigh cast a cloud over the market for Treasuries.
The 30-year Treasury issue opened in U.S. trading up 6/32 in price, which drove the yield down to 5.67 percent. Traders said a push to sell outweighed the benefits of a lower yen.
The Japanese yen fell to 142.29 to the dollar, near its lowest levels in five weeks.
That came as traders began to soak up news that Foreign Minister Keizo Obuchi, who won an election Friday to head up the ruling Liberal Democratic Party, is slated to become prime minister later this week.
Public opinion surveys and newspaper editorials over the weekend suggest there is widespread concern about whether Obuchi is ready to commit to bold reform, which many say is needed to mend Japan's beleaguered economy.
"The question now is who he's going to put in as finance minister," said Alison Montgomery, currency economist at I.D.E.A.
Reports last week suggested chief cabinet secretary Seiroku Kajiyama might get the nod, but he was a rival of Obuchi for the leadership of the LDP.
But Obuchi reportedly is leaning toward former prime minister Kiichi Miyazawa, who Montgomery said is seen as part of the "old guard" and more resistant to radical change.
Montgomery said she expects the yen to move into a range of 150-160 over the next three months unless there is intervention from government officials.
Analysts said they expected quiet trading in bonds Monday. Bonds gained amid a sell-off in stocks last week and traders were on guard that a rebound in stocks might siphon off those gains.
Nonetheless, stocks appeared headed for a continued fall Monday, based on trading in S&P Futures, which pointed to an opening dip of as much as 70 points in the Dow industrials. 
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