ASIAN currencies are likely to firm against the United States dollar but lose lustre against hard European currencies, according to Jurgen Luthi, president of the group management committee of Bank Julius Baer (BJB). Mr Luthi, in Hong Kong to mark the 10th anniversary of the bank's move into the territory - and to spread the word on Europe's virtues as a safe haven for Asian money - said BJB had noted a flight to quality among investors following the dollar's slide. The bank wants to double its assets in the next six years through new business, with much of the increase coming from East Asia. Hong Kong clients still account for about 50 per cent of its regional client base. BJB is a private bank focusing on three main activities - portfolio management, trading in the financial markets, and lending. At the end of 1994, assets under management totalled 43.62 billion Swiss francs (about HK$296.62 billion), slightly down on last year's total of 44.88 billion Swiss francs but 32 per cent higher than its asset total at the end of 1992. With the US dollar's role as a strong, safe-haven currency under threat, Mr Luthi predicted further buying of European currencies which had shown they could weather the turbulence of world foreign exchange markets. Even without a single European currency - Mr Luthi said he did not believe the European Union could achieve a single currency before 2000 - Europe still offered safe-haven investments. The bank's portfolio is weighted heavily towards that area, with 30 per cent in Swiss francs and another 31 per cent in other European currencies. He said that while Asia's booming economies would support their currencies, and help them to gain ground against the US dollar, he believed they would just hold their own against Europe's hard currencies, or lose ground. BJB was weighting its portfolio with what it believed were the hard European currencies: the Swiss franc, mark and Dutch guilder. Mr Luthi said BJB's holding of US dollars was limited to 20 per cent. He played down the Japanese yen as a possible investment, dismissing the yield on yen-denominated assets as 'miserable'. 'In Europe, you have six per cent to 6.5 per cent [in Germany], Switzerland has six per cent,' Mr Luthi said. 'The yen bond yield is below four per cent or 3.5 per cent. It's not attractive.' He expected one more possible rate rise from the US Federal Reserve, of not more than 0.5 percentage point, but did not think that would be enough to stem the currency's long-term decline. 'Long term I do not have too much confidence in the US dollar,' Mr Luthi said. Last year, a breakdown of investment showed 20 per cent of its funds going into equities, 17 per cent into other funds, 47 per cent into bonds, including convertible bonds, 15 per cent into money-market investments and one per cent into precious metals. The bank's portfolio currency mix is weighted heavily towards Europe, with 30 per cent in Swiss francs and another 31 per cent in other European currencies, 22 per cent in US dollars and the rest in miscellaneous currencies.