DOUBTS ABOUT ACCORD SEEN WEAKENING DOLLAR FURTHER The dollar is expected to decline further in coming days as scepticism mounts about the effectiveness of last month's Paris accord to stabilise currency exchange rates, senior foreign exchange dealers said. Following its fall today to a record 148.40 yen, dealers said they expect the dollar to establish a new trading range of 147 to 150 yen before the market again tries to push it down. Behind the latest dollar fall lies the belief that last month's accord was no longer enough to stop operators pushing the dollar down, the dealers said. "The recent remark by U.S. Treasury Secretary James Baker that the Paris accord did not set any target ranges for major currencies has cast a shadow on the agreement," said Koji Kidokoro, general manager of Mitsui Bank Ltd's treasury division. He said the market interpreted this as indicating the U.S. Would favour a weaker dollar and it had little intention of intervening to support the currency. "This eliminated the widespread market caution against possible joint central bank intervention," Kidokoro said. Dealers said the dollar had gathered renewed downward momentum and that Bank of Japan intervention alone could hardly contain a further slide in the currency. They said the central bank bought between one to 1.5 billion dlrs today, including direct purchases through brokers, and yesterday it might have bought a small amount of dollars through the U.S. Central bank in New York. Most dealers said they doubted the U.S. Federal Reserve would intervene on its own account to support the dollar, but some said this might occur if the dollar fell much below 148 yen. "If the dollar drops to that low level, it could reduce the flow of foreign capital into U.S. Securities, which the Americans don't want," said Haruya Uehara, chief money market manager of Mitsubishi Trust and Banking Corp. He said the dollar may return to around 152 yen next month when corporations reduce their dollar sales after they close their books for the 1986/87 business year ending on March 31. But dealers said the longer-term outlook for the dollar remained bearish. This was due to the lacklustre performance of the U.S. Economy, the continuing U.S. Trade deficit and Japanese delays in announcing an economic stimulation package. "The Americans are getting frustrated at Japan's inertia in stimulating its economy," said Hirozumi Tanaka, assistant general manager of Dai-Ichi Kangyo Bank Ltd's international treasury division. In the Paris currency accord Japan promised a package of economic measures, after the fiscal 1987 budget was passed, to boost domestic demand, increase imports, and thus reduce its trade surplus. The package was expected in April, but debate on the budget has been delayed by an opposition boycott of parliamentary business over the proposed introduction of a sales tax. In the circumstances the government had only a slim chance of producing a meaningful economic package in the near future, Dai-Ichi Kangyo's Tanaka said. Dealers said if steps are not taken to stimulate the Japanese economy protectionist sentiment in the U.S. Congress would grow and put more downward pressure on the dollar.