Wall Street's Rebound: Enjoy It While It Lasts

By Frank Pellegrini Wednesday, June 17, 1998
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NEW YORK: So the salad days are back, right? The Federal Reserve's yen-propping Wednesday certainly had the desired effect: The yen rebounded, the dollar retreated, and the Dow, in one spectacular burst, erased nearly all of Monday's losses and closed up Wednesday 164 points in the black. Tonight, look for Asia to be back in a buying mood.

But don't get used to it. "I'd be very suspicious," says TIME Wall Street columnist Daniel Kadlec. "This was a relief rally -- an excuse to bargain-hunt on the good yen news." Psychology, even on hair-triggered Wall Street, can only take the Dow or NASDAQ so far north. "There's a long history of central banks proving themselves unable to force a currency to stay up or down," says Kadlec. "The economic fundamentals always win in the end."