Stocks Plunge, Dollar Declines
TOKYO (AP) _ Tokyo share prices plunged Wednesday as disappointment about delays in government action to rescue the sinking economy continued to discourage investors. The U.S. dollar edged down against the Japanese yen.
The Nikkei Stock Average of 225 selected issues lost 395.54 points, or 2.34 percent, closing at 16,507.95. On Tuesday, the bellwether index had rebounded somewhat from heavy losses the previous day, gaining 63.11 points, or 0.37 percent, to 16,903.49.
The Tokyo Stock Price Index of all issues listed on the first section was down 24.54 points, or 1.73 percent, to 1,397.35. It had gained 6.75 points, or 0.48 percent, to 1,420.61 on Tuesday.
″Today’s losses were mostly because the downtrend that began Monday is being reinforced,″ said Paul Migliorato, senior salesman at Jardine Fleming Securities. ″The recent investment trust purchasing seems to have dried up.″
The Nikkei fell more than 600 points on Monday after Prime Minister Morihiro Hosokawa said the government is not planning any immediate package of measures to stimulate the economy. Previously, government officials had indicated that a package would be put together quickly.
Migliorato said investors’ perception of political disarray contributed to a sell-off. Measures to stimulate Japan’s sluggish economy could be delayed by disputes in Parliament over rice imports and political reforms.
The Nikkei index has fallen about 3,000 points, or some 15 percent, since the current downtrend began late in October. At the time, Hosokawa’s new eight-party coalition government was preoccupied with anti-corruption legislation, but it is now being pressed to deal with a slowdown that economists believe could last well into 1994.
The downtrend, one of the steepest in Japan’s three years of economic slowdown, began after Japanese manufacturers reported sharp profit declines across the board for the fiscal year half that ended in September. Many companies announced job cuts or cutbacks in production.
The dollar closed at 107.82 yen, down 0.13 yen from Monday’s finish but above its close in New York overnight of 107.48 yen. After opening at 107.58 yen, the dollar ranged between 107.57 yen and 107.85 yen.
Takayuki Suto, a dealer at Citibank, said Japan’s economic troubles gave investors little incentive to buy yen but that the market already had digested the recent release of upbeat U.S. economic statistics.
Dealers said the dollar’s fall since late last week is primarily due to technical supply-and-demand factors and appears to have stopped.
As of 3 p.m., the price of the benchmark No. 157 10-year Japanese government bonds was 109.62 yen, up 0.04 yen from Tuesday’s close. Their yield fell to 3.180 percent from 3.185 percent.