|
Bonds idle ahead of FOMC
|
 |
August 23, 1999: 9:23 a.m. ET
Dollar, beaten up last week, halts its slide against the yen
|
NEW YORK (CNNfn) - Treasury bond prices were little changed Monday morning in what is expected to be a quiet trading session ahead of a key Federal Reserve meeting on interest rates. The dollar, meanwhile, stabilized against the yen after testing seven-month lows versus the Japanese currency.
Just before 9 a.m. ET, the price of the benchmark 30-year Treasury bond fell 1/32 to 101-27/32. Its yield, which moves in the opposite direction from the price, rose to 5.99 percent from Friday's close of 5.98 percent
With no economic indicators due Monday, analysts expect a quiet, range-bound trading session leading into Tuesday's Federal Open Market Committee meeting.
That's when most observers expect the FOMC to raise the federal funds rate by a quarter of a percentage point to 5.25 percent.
A decision is expected Tuesday afternoon.
Dollar steadies
In the currency markets, the dollar halted its slide against the yen. This new-found stability comes after a week in which the U.S. currency sank to a seven-month low in relation to the yen.
Just before 9 a.m. ET, the greenback rose to 111.28 yen, up 0.03 percent from Friday's close off 111.25.
The yen's strength has come on hopes that Japan is finally recovering from recession. The optimism has brought a surge of investors into Japanese markets, pushing stocks higher.
Also aiding the yen, analysts say, is the belief that Japan's central bank may not intervene in the currency markets by selling yen. A strong yen, because it makes exports less attractive, could ultimately slow Japan's recovery from recession.
"Last week, there were comments from other Japanese officials which seem to imply that the Bank of Japan was standing back to some extent from the previous policy of intervening," said Tim Fox of Standard Chartered Bank. "And it wouldn't be completely against the wishes of the U.S. Treasury if the dollar were to weaken a little bit further. It would actually keep the pressure on Japan to reform."
But Monday, Japanese officials sought to temper the impression that they were unconcerned about their currency's rise.
The dollar, meanwhile, strengthened against the euro. Just before 9:00 p.m. ET, it cost $1.0611 to buy one euro compared with $1.0672 Friday, a 0.57 percent increase in the dollar's value. 
|
|
|
|
|
 |
|
