WEEK HIGH AROUND $625 AN OUNCE. IN TOKYO, JAPANESE SHARES CLIMBED TO A FOUR-WEEK HIGH AFTER THE BANK OF JAPAN'S TANKAN SURVEY SHOWED THAT BUSINESS SENTIMENT WAS IMPROVING AND LARGE COMPANIES PLANNED TO BOOST CAPITAL SPENDING. THE NIKKEI 225 AVERAGE ROSE 0.43 PERCENT, OR 66.44 POINTS, TO 15,571.62, ITS HIGHEST CLOSE SINCE JUNE 5. DOLLAR MIXED, BONDS LOWER THE GREENBACK SLID TO ITS LOWEST LEVEL AGAINST THE EURO IN ALMOST FOUR WEEKS ON AN UNEXPECTED DROP IN THE JUNE U.S. MANUFACTURING ACTIVITY INDEX FROM THE INSTITUTE FOR SUPPLY MANAGEMENT, WHICH RAISED WORRIES ABOUT SLOWER U.S. ECONOMIC GROWTH AND INCREASED THE PERCEPTION THAT THE FED MIGHT PAUSE IN ITS CYCLE OF INTEREST-RATE INCREASES. THE ISM MANUFACTURING INDEX SLIPPED TO 53.8 IN JUNE FROM 54.4 IN MAY AND FELL SHORT OF ECONOMISTS' FORECAST FOR A READING OF 55.0. ON THE OTHER HAND, A EURO-ZONE MANUFACTURING INDEX REACHED ITS HIGHEST LEVEL IN SIX YEARS, BOOSTING EXPECTATIONS OF FASTER GROWTH IN THAT REGION. THE EURO ROSE 0.17 PERCENT TO $1.2808 ON MONDAY FROM $1.2786 LATE FRIDAY IN NEW YORK. EARLIER ON MONDAY DURING NEW YORK TRADING HOURS, THE EURO ROSE AS HIGH AS $1.2823, ITS HIGHEST SINCE JUNE 7. BUT AGAINST THE YEN, THE DOLLAR GAINED 0.24 PERCENT TO 114.71 YEN FROM 114.43 YEN LATE FRIDAY. U.S. TREASURY DEBT PRICES MOSTLY FINISHED LOWER IN LIGHT VOLUME AS THE ISM REPORT SENT MIXED SIGNALS ABOUT AN ECONOMIC SLOWDOWN. WHILE THE HEADLINE NUMBER IN THE ISM SURVEY FELL, ITS UNDERLYING COMPONENTS WERE STRONGER THAN THE OVERALL FIGURE SUGGESTED, AND THAT LED TO UNCERTAINTY ABOUT WHAT THE FED WILL DO WITH INTEREST RATES IN AUGUST. HOWEVER, FED FUNDS FUTURES STILL SHOW A 68 PERCENT CHANCE OF A FED RATE INCREASE IN AUGUST. "IT DOESN'T PROVIDE ANY KIND OF CLUE THAT THE FED HAS TO COME IN AND TIGHTEN ON AUG. 8, SO THE JURY IS STILL OUT," SAID KEVIN FLANAGAN, A FIXED-INCOME STRATEGIST AT MORGAN STANLEY IN PURCHASE, NEW YORK. THE TWO-YEAR U.S. TREASURY NOTE WAS UNCHANGED IN PRICE AT 99-29/32 TO YIELD 5.18 PERCENT, JUST ABOVE 5.17 PERCENT AT FRIDAY'S CLOSE. THE BENCHMARK 10-YEAR NOTE SLIPPED 2/32 TO A PRICE OF 99-24/32, WHILE ITS YIELD ROSE TO 5.16 PERCENT FROM 5.15 PERCENT ON FRIDAY. THE 30-YEAR BOND FELL 8/32 TO A PRICE OF 89-12/32, YIELDING 5.21 PERCENT, UP 2 BASIS POINTS FROM 5.19 PERCENT LATE FRIDAY.
