LOOKS LIKE ANOTHER BAD WEEK AHEAD

With the dollar sliding and the Japanese authorities unable to do anything meaningful to stop the yen from rising - this morning it was near to 115 to the dollar - the opening of trading on Wall Street doesn't augur for the best of weeks:

Stocks skidded at the open on Monday, pushing the blue-chip Dow down more than 1 percent, as a proposed $60 billion acquisition by drug giant Pfizer Inc. failed to inspire investors still reeling from last week's brutal selloff. The blue-chip Dow Jones industrial average fell 148 points, or 1.72 percent, to 8,535. The broader Standard & Poor's 500 index lost 13.60 points, or 1.48 percent, to 907. The Nasdaq Composite dropped 19 points, or 1.35 percent, to 1,355.

Doubts over corporate credibility, fears of another attack on the United States and apprehension over the earnings season are roiling Wall Street. The S&P 500 lost 6.85 percent and the Dow sank 7.4 percent last week -- suffering their largest weekly drops since the market reopened following the September attacks. The Nasdaq sank 5.2 percent, its largest weekly decline since April.
Source: Reuters Yahoo News
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And doubts over the sincerity and effectiveness of Bush's corporate clean up too, no doubt. Of course the week's just opening so it's early days yet, but it isn't shaping up too hot. Meanwhile the Japanese authorities seem all but powerless in the face of a rising yen.

JGB futures reached an eight-month high last week, as Japanese equities were eroded by a strong yen and weak sentiment. That pattern resumed on Monday, as the technology-weighted Nikkei 225 average fell 2.1 per cent to a three-week low after weak US consumer confidence data on Friday surprised market watchers. The yen rose to Y115.52 versus the dollar, the currency's strongest showing since last September, also driving buying of JGBs as a relatively safe yen-denominated instrument.
Source: Financial Times
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And the Euro achieves parity with the Euro:

The dollar's weakness on Monday helped the euro breach parity with the US currency for the first time in more than two years, and analysts forecast further gains for the single currency.The euro reached $1.0 for the first time in 28 months as investors' wariness towards US assets depressed the dollar. The single currency hit a high of $1.0049 in European afternoon trade, rising from $0.9941 in late Asian trade."The euro struggled on a number of previous occasions to break parity, but investors have figured there is little Alan Greenspan can do to calm nerves in his speech on Tuesday, they decided to make the breakthrough," said Will Rugg, senior currencies analyst at Standard and Poor's in London.The chairman of the US Federal Reserve will on Tuesday begin his semi-annual testimony to Congress.The euro has gained nearly 11 per cent in the year to date and risen nearly 22 per cent from its record low of $0.8225 in October 2000.
Source: Financial Times
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As one of the quoted commentators said "The Japanese government is powerless to stop the yen's rise against the dollar, because it's not a yen problem, but a dollar problem." And to top it all US inventories go for a mysterious stroll downwards.

U.S. business inventories unexpectedly increased in May, posting their first rise in 16 months as sales fell, the government said on Monday.
The surprise increase came as sales slid 0.4 percent after a strong 1.7 percent gain in April. With sales off and stocks up, the inventories-to-sales ratio -- a measure of how many months it would take to sell off inventories at the current sales pace -- ticked up to 1.36 in May from 1.35 in April.

With this stocks-to-sales ratio hovering near historic lows, many economists expect businesses to try to refill their depleted shelves. However, a drop in sales is not the businessman's preferred method of boosting inventories. But economists noted that sales have picked up since May.
Source: Reuters Yahoo News
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Whatever the final story on this, it's clear it's not good news. So that leaves us sitting, peering into our screens, waiting to see what's going to turn up next, or how long Japan can take the strain? Maybe now the American consumer is tiring of all the weightlifting the Japanese pensioners are ready to take over. One thing is pretty clear, all of this is unsustainable for any length of time.