TOKYO DEALERS SEE DOLLAR POISED TO BREACH 140 YEN
  Tokyo's foreign exchange market is watching
  nervously to see if the U.S. Dollar will drop below the
  significant 140.00 yen level, dealers said.
      "The 140 yen level is key for the dollar because it is
  considered to be the lower end of the reference range. If the
  currency breaks through this level, it may decline sharply,"
  said Hirozumi Tanaka, assistant general manager at Dai-ichi
  Kangyo Bank Ltd's international treasury division.
      The dollar was at 141.10 yen at midday against Friday
  closes of 142.35/45 in New York and 141.35 here.
      The dollar opened at 140.95 yen and fell to a low of
  140.40. It was 1.7733/38 marks against 1.7975/85 in New York
  and 1.8008/13 here on Friday, after an opening 1.7700/10.
      The currency's decline was due to remarks on Sunday by U.S.
  Treasury Secretary James Baker, dealers said.
      "The dollar fell over the weekend on increased bearish
  sentiment after Baker's comments," said Dai-ichi's Tanaka. He
  said this stemmed from mounting concern that cooperation among
  the group of seven (G-7) industrial nations to implement the
  Louvre accord to stabilise currencies might be fraying.
      The dollar's fall was also prompted by a record one-day
  drop in the Dow Jones industrial average on Friday and weakness
  in U.S. Bond prices, dealers said.
      Baker said the Louvre accord was still operative but he
  strongly criticised West German moves to raise key interest
  rates. Operators took Baker's comment to indicate impatience
  with some G-7 members for failing to stick to the Louvre accord
  due to their fears of increasing inflation.
      Rises in interest rates aimed at dampening inflationary
  pressures also slow domestic demand.
      West Germany and Japan had both pledged at G-7 meetings to
  boost domestic demand to help narrow the huge U.S. Trade
  deficit, Tanaka said.
      U.S. August trade data showed the U.S. Deficit at a still
  massive 15.68 billion dlrs. But if West Germany raises interest
  rates, this would run counter to the pledge, he said.
      "Operators are now waiting to see if the G-7 nations
  coordinate dollar buying intervention," said Soichi Hirabayashi,
  deputy general manager of Fuju Bank Ltd's foreign exchange
  department.
      The target range set by the Louvre accord is generally
  considered to be 140.00 to 160.00 yen, dealers said.
      "The market is likely to try the 140 yen level in the near
  future and at that time, if operators see the G-7 nations
  failing to coordinate intervention, they would see the Louvre
  accord as abandoned and push the dollar down aggressively,"
  Hirabayashi said. He said the U.S. Currency could fall as low
  as 135 yen soon.
  

