Money moves away from yen after earthquake

Money shifted from the Japanese yen to the German mark yesterday as Japan began to count the cost of reconstructing Kobe after the earthquake. The mark had risen Y0.38 to Y65.03 by the close of business in London.

Italian markets, meanwhile, staged a quick recovery from the political shock caused by the former prime minister's apparent refusal to support the new administration led by Lamberto Dini.

The lira opened at its overnight low of 1,060 to the mark, but rallied after the new administration indicated its willingness to balance the new ministers by retaining the under-secretaries from the previous administration, a move that appeared to placate Silvio Berlusconi.

The mark ended at 1,055.90 lire and share prices rallied strongly. The Mibtel index reversed a 336-point fall to close 157 better on balance at 10,761, and Fiat closed 20 lire higher at 6,645 lire from a low of 6,325 lire.

Madrid markets reflected the better mood in Milan, and the peseta edged up to close at 86.92 to the mark from an overnight 87.07, while the 35 share index rose 4.82 to 3,041.22. Local brokers believe the market is 10 per cent undervalued if the politicaluncertainties can be dispelled. Most other European markets were slightly higher on the day.