American focus: yen may strengthen on speculations BOJ will raise rates [E]

With no important economic data, market players 

focused on BOJ meeting this week. If the central bank 

will raise the rates, it will support national currency. Base rate of BOJ is 0.1% since 2001. The yen is strengthening for 2 weeks versus the 

dollar on speculations on rates hike in Japan. 

Growing possibility of rate lift supported yen during last 4 days when the currency rose 1.3 %. The quarter review of Bank of Japan 

Tankan published on July, 03rd has shown growth of business optimism in 

the country up to a 16-years highs. However you should remember current geopolitical risks. Growth of yen can be limited after 

the prime minister of Japan Koitzumi said today he wishes the fast decision on sanctions to Northern 

Korea which on July, 05th launched 7 long-range missiles to 

the Japan Sea on July 5. Yesterday Koizumi noted the government 

carefully studies legitimacy of Korea actions. 

Wall Street opened with losses as futures market predicted. Main 

pressure comes from the warning of telecommunication equipment producer Lucent Technologies about profit.  Company expects earnings will be reduced 

in Q3 basically due to slowdown of equipment's sales in North America. 

The manufacturer of storage of databases' equipment EMC showed 

financial results which didn't justify forecasts of the company. Alcoa earnings 

rose in Q2, however, revenue missed the forecasts. Internet 

provider America Online expects the decrease of operation revenue at $1 

bln. through 2009 because of the program on granting free-of-charge 

services to some clients. Google plans to build office and research 

center in Ann Arbor (Michigan), where about 1,000 persons will work, 

New York Times writes.