EXCHANGE RATES ALMOST WITHIN G-6 LEVELS - SUMITA

  Bank of Japan governor Satoshi Sumita
  said that current exchange rates are almost within the levels
  agreed to by six major nations last month in Paris.
      Asked whether a dollar/yen rate of 148 or 149 reflected
  economic fundamentals, he said current rates almost reflect
  fundamentals.
      Sumita told reporters major nations have cooperated to
  bring about currency stability in line with the Paris
  agreement, which stipulated that they would closely cooperate
  to that end. He repeated the central bank will intervene if
  necessary, adding he did not think a dollar free-fall was
  likely.
      But Sumita said he could not say exactly what currency
  levels would be considered in line with underlying economic
  fundamentals.
      In Paris on February 22, Britain, Canada, France, Japan,
  the U.S. And West Germany agreed to cooperate to hold
  currencies around their then current levels.
      Sumita said he could not find any specific reasons behind
  the fall of the dollar to a record low against the yen
  yesterday. But he said the market rushed to sell dollars as it
  nervously reacted to statements abroad and to developments
  surrounding trade tensions.
      U.S. Treasury Secretary James Baker said over the weekend
  that the Paris pact did not encompass fixed tragets for the
  dollar. U.S. Trade Representative Clayton Yeutter called
  U.S/Japan relations on certain key trade issues very strained.
      The market reacted nervously because the dollar has been
  moving narrowly against the yen since mid-January, Sumita said.
  He added he does not expect the yen/dollar exchange rate to
  remain unstable because the market is concerned about a sharp
  rise of the yen.
      The Bank of Japan will keep a close watch on exchange rates
  in line with the Paris accord, he added.
  

