TOKYO, Nov 7: News threatening to undermine the traditional base for Japan's economic strength and the revived focus on the weak Japanese economy accelerated yen selling against major currencies on Friday, leaving the dollar higher than its levels in New York late Thursday.

The US currency weakened slightly against the deutsche mark on traders' position adjustment.

Japanese financial daily Nihon Keizai Shimbun reported Friday morning that top regional bank, Bank of Yokohama Ltd, would sell almost all of its shares in its loosely-

affiliated companies over the next few years.

The sell-off is reportedly aimed at dissolving share crossholding a practice which has traditionally strengthened each member company in a given group and is seen as one of the pillars of Japan's economy.

``The news pushed Japanese stock prices into a steep dive, which in turn made the yen even more unattractive,' said Shuichi Noji, a trader at Hokkaidao Takushoku Bank.

Around 5.40 GMT, the dollar is quoted at yen 123.75, above yen 123.22 late Thursday in New York and up from yen 123.20 late Thursday in London.

It is at DM1.7210, lower than DM 1.7230 late Thursday in New York but slightly above DM1.7205 in London Thursday.

The mark is quoted at y71.92, up from y71.51 in New York late Thursday and above y71.62 in London late Thursday.

The yen was also actively sold against the sterling after the Bank of England raised its official discount rate to 7.25% from 7.00% Thursday, sterling rose to an intraday high of ¥ 209.28.

Sterling is at $1.6910 in London late Thursday. Market watchers are now beginning to expect that the dollar will further rise to y125.00 as wariness over verbal intervention by Japan's financial authorities subsides. ``The recent comments by financial officials lack the impact to bolster the yen,' Hokkaido Takushoku's Noji noted.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.