Yen May Weaken on Signs More Corporate Bankruptcies to Come

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

10/09 19:49 Yen May Weaken on Signs More Corporate Bankruptcies to Come By Mari Murayama and Miki Anzai

Tokyo, Oct. 10 (Bloomberg) -- The yen may weaken against the dollar for the first time in four days after a life insurance company failed, spurring concerns more bankruptcies will diminish confidence in Japan's financial system.

Chiyoda Mutual Life Insurance Co., Japan's 12th largest life insure, yesterday filed for bankruptcy in Japan's biggest post-war failure in the industry.

``The bankruptcy may mountain concerns that more financial companies may follow,'' said Tadatoshi Taso, a foreign exchange manager at Bank of Tokyo-Mitsubishi Ltd.

The yen traded at 108.83 per dollar, little changed from 108.82 yen in late New York trading yesterday. Against the euro, it traded at 94.395, little changed from 94.495 in New York.

Chiyoda Life's bankruptcy leaves 2.94 trillion yen in liabilities, surpassing Japan Leasing Corp.'s 1998 collapse under 2.2 trillion yen, according to Teikoku Databank Ltd. It marks the life insurance industry's fifth bankruptcy since World War II.

Separately, Japan will release its first balance sheet, tallying assets and liabilities, later today. It could show the country as much as 780 trillion yen in the red, the Nihon Keizai newspaper said last week.

``Large liabilities may be taken as a negative factor'' for Japan and yen, said Takeo Okabe, senior forex manager for Daiwa Bank Ltd.

Japan's balance sheet will show that, depending on how future payments are calculated, liabilities will exceed assets by 130 trillion yen, 270 trillion yen or 780 trillion yen, the Nihon Keizai newspaper said last week, citing a draft copy of the balance sheet. Assets total 660 trillion yen, the paper said.

The euro traded at 86.75 U.S. cents, little changed from 86.86 cents in New York trading yesterday. The dollar rose to 1.7535 Swiss francs from 1.7515 francs in late New York. The British pound was quoted at $1.4485, down from $1.4487 yesterday.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOeJZexVDWWVuIE1h

-- Carl Jenkins (Somewherepress@aol.com), October 09, 2000


Moderation questions? read the FAQ