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Sarah Davison
HONG KONG, Sept 3: The US dollar was lower against the yen on Thursday on growing expectations that the next US interest rate move will be a cut. Dollar/yen was at 136.90 at 0600 GMT.
Regional currencies failed to gain much of a lift from yen strength, as fears of a second missile test by North Korea and Malaysia's retreat from world markets soured investors on Asia.
"This is becoming a little tiresome," said Abhijit Chakraborrti, strategist at HSBC Securities. "We have been so negative for such a long time now." Asia's big markets were mixed, thin and moving sideways, offering no clear direction for Europe or the United States, traders said.
Hong Kong got a boost from short-covering while Tokyo lost ground on a revised earnings forecast from Hitachi. Hong Kong's Hang Seng index of blue chips ended the morning session 1.15 per cent higher at 7,440, while Tokyo shares were off 0.80 per cent at 14,261.24 at 0600 GMT.
Japan warned that North Korea was close to firing a second missile following its firsttest over Japan on Monday, even as Pyongyang appealed to the world for more food aid because of new damage from bad weather.
Malaysia continued to dominate Asia's attention with prime minister Mahathir Mohamad's sudden dismissal late on Wednesday of his deputy and finance minister, Anwar Ibrahim.
News of an investigation into Anwar added political turbulence to Malaysia's economic upheaval, which the region is watching with great interest.
Some of the measures have won support as stop-gap moves to counter Malaysia's economic woes, but foreign investors were expected to give Malaysia a wide berth. The outlook for markets in Europe and the United States remains mixed.
London's FTSE 100 index closed 1.3 per cent higher at 5,235 on Wednesday with investors unconvinced of the strength. The Dow Industrials ended 45 points or 0.6 per cent weaker on Wednesday at 7,782 after jumping 288 points on Tuesday. New York stocks slumped nearly six per cent on Monday.
"The Dow has now had quite a significant fallfrom the top and we now have a situation where that fall actually paves the way for interest rates to be cut," said Chakraborrti.
But any support to consumption from a cut in US rates would be countered by consensus earnings forecasts of about seven per cent, which are still unrealistic, he said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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