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Bonds rally, dollar strong
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April 2, 1998: 5:41 p.m. ET
Late news attracts buyers for bonds, dollar keeps solid gains against yen
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NEW YORK (CNNfn) - Bonds rallied in late trading Thursday, amid relief about the Fed's recent views on interest rates, and the dollar held on to its strong gains against the Japanese yen as more data showed just how weak the economy is in the Land of the Rising Sun.
The bond market spent most of the day treading water in a narrow trading range, as most market players opted for caution ahead of Friday's key March employment report.
But late in the day, as word got out that all 12 Federal Reserve policy makers voted to leave rates unchanged at the Fed's policy meeting Feb 3 and 4, investors abandoned all caution and went on a buying spree that took the price of the benchmark 30-year Treasury bond up 19/32 of a point, and brought the yield down to 5.84 percent.
Meanwhile, the dollar continued to climb against the yen, drawing strength from a 3.3 percent decline in Tokyo's Nikkei 225 stock market index overnight and a much worse than expected "tankan" -- a quarterly survey of business sentiment published by the Bank of Japan.
The "tankan" index tanked in March to -31 from -11 in December, the worst decline the index has seen in 3-1/2 years.
The bad news was added to comments from the chairman of Sony Corp., who warned that Japan's economy is on the brink of collapse and lashed out at Tokyo's leaders for failing to act in support of the country's economy.
Adding insult to injury, U.S. Trade Representative Charlene Barshefsky criticized Japan's ambitious "Big Bang" plan to reform the country's financial system, calling the package vague.
The dollar also rose against the German mark as doubts crept into the market about the future of Europe's planned monetary union. These doubts were prompted by a German central banker, who told Reuters news agency that including nations that fail to meet the required fiscal health levels could prove disastrous for the monetary union. Italy and Belgium, both burdened with high levels of public debt, are among the 11 countries scheduled to adopt a single European currency early next year. 
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