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here in this new center for japanese assembly plants just across the border from san diego turnover is dizzying infrastructure <unk> bureaucracy intense
even <unk> drag <unk> bars where japanese <unk> <unk> over recorded music are prohibited by mexico 's powerful musicians union
still N japanese companies including giants such as <unk> industries corp. <unk> electronics components corp. and sony corp. have set up shop in the state of northern <unk> california
keeping the japanese happy will be one of the most important tasks facing conservative leader <unk> <unk> when he takes office nov. N as the first opposition governor in mexico 's modern history
mexico with its desperate need for investment and japan with its huge budget surplus would seem like a perfect match
but the two countries remain <unk> by a cultural barrier wider than the ocean
conservative japanese investors are put off by what they consider mexico 's restrictive investment regulations and loose work habits
from the <unk> ' viewpoint <unk> tactics of <unk> japanese managers do n't count for much in a land where a saying says there are no fixed rules
japan ranks as only the fourth largest foreign investor in mexico with N N of the total investments
that is just N N of all the money japan has invested abroad
mexican president carlos salinas de <unk> would like to change that
the young president so <unk> japanese discipline that he sends his children to a japanese school in mexico city
he already has <unk> a $ N billion loan from the japanese government
but mexico <unk> needs more help
mr. salinas 's unpopular institutional revolutionary party or <unk> faces congressional elections in N
for the <unk> to stand a chance mr. salinas has to press on with an economic program that so far has succeeded in lowering inflation and providing moderate economic growth
but maintaining the key components of his strategy a stable exchange rate and high level of imports will consume enormous amounts of foreign exchange
mr. salinas needs big investment inflows quickly
the problem is that japanese businesses make decisions with a view well beyond the coming months that weigh so heavily on mr. salinas
the japanese will come to mexico but not immediately says <unk> <unk> <unk> of the japanese external trade organization in mexico
if not now when
when the fruit is <unk> it falls from the tree by itself he says
pressed on the matter he is more specific
there will be big japanese investments probably five to N years from now
<unk> <unk> japan 's ambassador to mexico agrees that mexico may be too eager
there seems to be a <unk> in some sectors of mexico 's government that there is a lot of japanese money waiting behind the gate and that by slightly opening the gate that money will enter mexico
i do n't think that is the case
mexican officials maintain the japanese reserve is only a result of <unk>
because of distance it takes a while for them to appreciate the economic stability we 've achieved says one economic <unk>
mexico is sending a number of <unk> to japan looking for a major <unk> investment in telecommunications petrochemicals or tourism
it is hoped that other japanese would then follow the leader
but japanese investors say that their reluctance to invest stems not only from concerns about mexico 's economic outlook but also reservations about mexico 's recently revamped investment law
unable to get a new law through a congress with a strong leftist bloc mexico <unk> the existing law 's regulations
it created special 20-year trusts to allow foreigners N N ownership in some <unk> industries
it also made <unk> use of <unk> <unk> as <unk> industries some that had been in the national <unk>
those devices do n't give sufficient <unk> to our bosses in japan says <unk> <unk> representative of the industrial bank of japan
mr. <unk> cites the case of a customer who wants to build a giant tourism complex in <unk> and has been trying for eight years to get around mexican restrictions on foreign ownership of <unk> property
he could develop the beach through a trust but instead is trying have his <unk> become a <unk> mexican so his family gains direct control
some say the best hope for the <unk> is catching the eye of japan by promoting the one industry the japanese clearly like the border assembly plants known as <unk> which are open to N N foreign control
we must do more to help the japanese here in <unk> if we want them to invest elsewhere says mr. <unk> the <unk> of the national action party and himself a <unk> businessman
plant operators are <unk> by mr. <unk> 's pledge to cut corruption associated with the ruling party officials
but mr. <unk> <unk> that an even bigger problem could be <unk> from the u.s. where some politicians oppose what they consider japanese efforts to use <unk> to crack the u.s. market through the back door
shaken by tumbling stock prices and pessimistic projections of u.s. economic growth currency analysts around the world have <unk> down their <unk> of the dollar 's near-term performance
most of the N analysts polled last week by dow jones international news service in frankfurt tokyo london and new york expect the u.s. dollar to ease only mildly in november
opinion is mixed over its three-month prospects
half of those polled see the currency <unk> lower over the next three months while the others forecast a modest rebound after the new year
in late afternoon new york trading yesterday the dollar stood at N west german marks up from N marks late monday and at N yen up from N yen late monday
a month ago a similar survey predicted the dollar would be trading at N marks and N yen by the end of october
sterling was trading at $ N down from $ N late monday
in tokyo wednesday the u.s. currency was trading at about N yen at midmorning up from N yen at the opening and up from tuesday 's tokyo close of N yen
the average of estimates of the N economists polled puts the dollar around N marks at the end of november and at N yen
by late january the consensus calls for the dollar to be trading around N marks and near N yen
those with a bullish view see the dollar trading up near N marks and N yen while the dollar bears see the u.s. currency trading around N marks and N yen
a number of those polled predict the dollar will slip as the federal reserve <unk> interest rates
david owen an economist at kleinwort benson & co. in london said he expects further cuts in short-term u.s. rates in an effort to encourage a narrowing of the trade gap and to ensure a soft landing in the u.s. economy
robert white a vice president and manager of corporate trade at first interstate of california agreed with that view and predicted the u.s. federal funds rate will drop to between N N N and N N within N days from its current level at N N N
fed funds is the rate banks charge each other on overnight loans the fed influences the rate by adding or <unk> reserves from the banking system
mr. white also predicted a <unk> cut in the u.s. discount rate in the near future
the discount rate currently N N is the rate the fed charges member banks for loans using government securities as collateral
he expects such a cut because of problems in several sectors of the economy particularly real estate and automobiles
<unk> his argument the commerce department reported yesterday that new home sales for september were down N N from august 's revised N N fall
the drop marked the largest monthly tumble since a N N slide in january N
in last month 's survey a number of currency analysts predicted the dollar would be pressured by a narrowing of interest rate <unk> between the u.s. and west germany
indeed in early october the west german central bank raised its discount and <unk> rates by a full percentage point
several other european central banks notably in britain followed the west german <unk> 's lead by raising their own key rates
and a week later japan raised its official discount rate by a half point to N N
the japanese discount rate is the central bank 's base rate on loans to commercial banks
after a surprisingly sharp widening in the u.s. august merchandise trade deficit $ N billion from a revised $ N billion in july and well above expectations and a startling 190-point drop in stock prices on oct. N the federal reserve <unk> short-term interest rates knocking fed funds from around N N to N N N
but predictions that central banks of the group of seven <unk> major industrial nations would continue their massive dollar sales went <unk> as the market drove the dollar downward on its own reacting to wall street 's plunge and subsequent price volatility lower u.s. interest rates and signs of a slowing u.s. economy...
<unk> consists of the u.s. japan britain west germany canada france and italy
<unk> <unk> senior deputy manager in the treasury department of mitsui bank ltd. in tokyo suggested that uncertainty about u.s. stocks and bonds has made japanese investors leery of holding those securities in the near term thus <unk> dollar demand
but mr. <unk> added once u.s. equities regain some stability players will move back into dollar-denominated investments especially treasury bonds whose value rises when interest rates decline
mr. <unk> said the key <unk> exchange rate is at N yen
if N is broken some panic will be seen he predicted explaining that japanese institutions are comfortable with the dollar anywhere between current levels and N yen
<unk> <unk> a senior trader at manufacturers hanover trust co. in frankfurt said he expects the dollar to recover within the next three months to around N marks as u.s. economic data particularly u.s. trade figures level off
he contended that the fed wo n't ease rates further but predicted <unk> officials will relax key rates in west germany
alfred <unk> chief trader at bank of boston in frankfurt took an opposite stance
he said he expects u.s. interest rates to decline dragging the dollar down to around N marks by the end of january after a short-lived <unk> to N marks by the end of november
west german interest rates he said will remain unchanged
but i 'm not one of these great dollar bears you see more of these days mr. <unk> said
i ca n't really see it dropping far below N marks
scott greene chief foreign exchange dealer with <unk> <unk> & co. in new york fits the <unk> of a great dollar bear
he predicted the u.s. unit will <unk> below N marks to around N marks this month and N marks by the beginning of the new year
we 're finally seeing the culmination of all the <unk> buildup of the last few months he said noting a continuing downward trend in u.s. interest rates a shaky stock market and <unk> economic times ahead all signal a significantly lower dollar
in the wake of british chancellor of the exchequer nigel lawson 's surprise resignation and sterling 's subsequent <unk> most analysts had little good to say about the pound 's near-term prospects
mr. owen of kleinwort benson suggested that the new chancellor john major will take a tough line in his autumn statement later this month helping to <unk> the pound
but he warned the currency will remain at risk
on the commodity exchange in new york gold for current delivery dropped $ N to $ N an ounce in moderate trading
estimated volume was N million ounces
in early trading in hong kong wednesday gold was quoted at $ N an ounce
christopher hill in tokyo nicholas hastings in london <unk> <unk> in frankfurt and <unk> <unk> and douglas <unk> in new york contributed to this article
west germany will repeal the unpopular turnover tax on securities transactions as of jan. N N economics minister helmut <unk> said
he said the government will also repeal the N N transaction tax on the first-time purchase of stakes in companies
the announcement follows several comments by government officials that the government will speed up the repeal of the tax which was originally scheduled to fall with the start of the single internal market in the european community at the end of N
the <unk> tax has been long criticized by the west german financial community because it tends to drive securities trading and other banking activities out of frankfurt into rival financial centers especially london where trading transactions is n't taxed
the tax has raised less than one billion marks $ N million annually in recent years but the government has been reluctant to abolish the levy for budgetary concerns
in the interview mr. <unk> did n't specify the amount of revenue the government will lose after the tax disappears
the new date means that the tax will be officially <unk> before the end of the current parliamentary term at the end of N and guarantees its <unk> even if the current <unk> coalition loses the elections in december N
earlier this year president bush made a final <unk> it offer on the minimum wage an increase to $ N an hour over three years and only if accompanied by a lower wage for the first six months of a job
now the white house has decided to accept the higher wage over only two years