THE PRESIDENT'S DAILY BRIEF 26 JANUARY 1972

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993103
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 6
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: January 26, 1972

Declassified in Part-Sanitized Copy Approved for Release 2016/07/18 : CIA-RDP79T00936A010300230001-7
The President's Daily Brief
26 January 1972
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
26 January 1972
PRINCIPAL DEVELOPMENTS
There is talk in Japanese business circles that the
yen may be revalued again this spring in view of
Japan's continuing strong trade position. (Page 1)
(Page 2)
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JAPAN
Many Japanese business leaders and economists
believe that the yen remains an undervalued cur-
rency. According to several top businessmen, a cur-
rency reform in May will involve a three-percent
revaluation and replace 100 old yen with one new
yen. The yen-dollar ratio would then be three to
one.?
These predictions arise from Japan's continuing
strong trade position. Last year Japan had the
largest trade surplus of any country in the last
25 years, $7.9 billion, including a $3.5-billion
surplus with the US. Japanese forecasters unani-
mously predict another huge surplus for 1972, with
most estimates pointing to a $7-billion figure.
We believe that the Sato government would
be loath to revalue unilaterally, even in
the small amount being rumored. It has
already been chastised for going too far
recently and the recession is now being
felt. However, if a large trade surplus
continues in the first quarter, when
Japan's balance usually shows a seasonal
decline, speculative pressure for revalua-
tion would likely increase.
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CHILE
President Allende is having trouble putting-to-
gether a new cabinet,. Some coalition party leaders
appear to be, resisting his demand that he have .a
free hand in determining the government's course.
There is also objection to his intention to bring
technicians into-the cabinet and to broaden its
political base.
Allende has offered a cabinet post to Radomiro Tomic,
his 1970 election opponent who retains some influ-
ence among leftist Christian Democrats
An offer to Tomic would accord with ear-
lier reports that Allende is trying to
split off Christian Democratic factions.
and induce them to join his cabinet.
Allende's acceptance of Defense Minister
Toha's resignation, following Senate ap-
proval Saturday of Toha's impeachment as
interior minister, may reflect nudgings
from the military chiefs. The remainder
of the cabinet has stayed on in caretaker
status since its resignation on 20 Janu-
ary.
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NOTE
Yugoslavia: President Tito's party conference
speech yesterday sought to play down the nationalist,
unrest that has been troubling the country in. recent,
months and to renew public confidence by emphasizing
Yugoslavia's "enormous" achievements. He did, how-
ever, criticize the party for not fulfilling the
tasks. set forth by the. last party congress. Tito
repeated his earlier calls for a party reorganiza-
tion aimed at creating a compact, tightly controlled,
and disciplined cadre. The fact that it required'
an eleventh-hour presidium session on Monday to iron
out specific proposals on party reform indicates
that' resistancefrom those who want to preserve ,a
decentralized system remains strong.
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