Given that Japanese monetary authorities have indicated their commitment to keeping the dollar from falling below 105 yen, the dollar-yen rate appears unlikely to snap out of its current 105-110 yen range anytime soon.

Among major players in spot dealings, Japanese export and import companies have few reasons for taking major positions in the quiet market.

Export-oriented companies have unloaded their dollar holdings from time to time when the unit moved lower, refraining from building long dollar positions that eventually translate into selling pressure on the yen.

Japanese institutional investors remain cautious about new purchases of foreign securities, as do foreign investors about investment in Japanese securities.

Their moves are thus helping to balance a flow of money between Japan and other countries.

It is interesting to note that a model of asset preferences based on gaps in actual interest rates and the balances of payments between Japan and the United States shows the current 105-110 yen range is close to a reasonable level.

A theoretical rate obtained from a similar model of statistics for the April-June period was 107 yen, close to the actual average rate of 108 yen for the second quarter, indicating currency relationships can hardly deviate far from levels determined by underlying economic fundamentals.

At its policy-setting meeting Monday, the Bank of Japan decided to leave its "zero-interest-rate" policy intact for now.

The BOJ apparently opted to wait and see what impact the collapse of Sogo Co. would have on the economy and the financial market.

If the impact is confirmed to be limited, the BOJ will again begin thinking in earnest about the proper timing for ending its ultraeasy money policy.

In my view, that timing could come in mid-September, when preliminary figures are due out on the gross domestic product for the second quarter, or in early October, when the BOJ announces its quarterly "tankan" business sentiment survey.

In any event, the market's reaction to the shift in policy should be muted by built-in expectations of the move.