U.S. COMMERCE'S ORTNER SAYS YEN UNDERVALUED

  Commerce Dept. undersecretary of
  economic affairs Robert Ortner said that he believed the dollar
  at  current levels was fairly priced against most European
  currencies.
      In a wide ranging address sponsored by the Export-Import
  Bank, Ortner, the bank's senior economist also said he believed
  that the yen was undervalued and could go up by 10 or 15 pct.
      "I do not regard the dollar as undervalued at this point
  against the yen," he said.
      On the other hand, Ortner said that he thought that "the yen
  is still a little bit undervalued," and "could go up another 10
  or 15 pct."
      In addition, Ortner, who said he was speaking personally,
  said he thought that the dollar against most European
  currencies was "fairly priced."
      Ortner said his analysis of the various exchange rate
  values was based on such economic particulars as wage rate
  differentiations.
      Ortner said there had been little impact on U.S. trade
  deficit by the decline of the dollar because at the time of the
  Plaza Accord, the dollar was extremely overvalued and that the
  first 15 pct decline had little impact.
      He said there were indications now that the trade deficit
  was beginning to level off.
      Turning to Brazil and Mexico, Ortner made it clear that it
  would be almost impossible for those countries to earn enough
  foreign exchange to pay the service on their debts.  He said
  the best way to deal with this was to use the policies outlined
  in Treasury Secretary James Baker's debt initiative.
  

