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A series of imminent events seem likely to presage future developments on the currency market.

Prime Minister Junichiro Koizumi, who will have a summit Saturday with U.S. President George W. Bush at the Camp David, Md., retreat appears to be seeking U.S. understanding of his reform agenda.

The summit could provide Koizumi with opportunities to learn from the market-oriented policies that helped the U.S. bounce back from the savings and loan crisis of the 1980s.

When the dust settles, the yen may come under fresh downward pressure and test 130 to the dollar.

The Koizumi administration, by announcing its “big-boned” policy outline, has signaled to the marketplace that it intends to press forward with painful restructuring and declared it will strengthen Resolution and Collection Corp. to clear the way for the early disposal of banks’ bad loans.

By giving a formal go-ahead to the economic-recovery scenario, the government has committed itself to the structural reform program and nudged the Bank of Japan to do more to help shore up the economy.

The ruling Liberal Democratic Party has taken heart from its strong showing in Sunday’s Tokyo Metropolitan Assembly election and now appears to be preparing itself to make gains in July’s Upper House election, riding the coattails of the popular prime minister.

There is little dispute that economic restructuring measures will have a negative impact on the economy in the near term and could weigh heavily upon the yen.

When the yen weakened to 126 to the dollar in early April, government officials openly tried to talk it back up, saying the exchange rate should reflect underlying economic fundamentals.

With the specter of hard times looming large, however, their remarks can be taken to mean that a weak yen resulting from economic restructuring would be inevitable.

Indeed, U.S. officials have openly indicated they would tolerate a weak yen resulting from Japan’s restructuring program.

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