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Tokyo Stocks Down Early

January 6, 1998

TOKYO (AP) _ The dollar jumped to its highest level against the yen in more than 5 1/2 years early Tuesday before retreating slightly after intervention by the Bank of Japan. Stock prices fell.

The dollar bought 133.39 yen at mid-morning, up 0.55 yen from late Monday in Tokyo but below its late New York level of 133.78 yen.

Earlier, however, buying by Japanese institutional investors and hedge funds briefly pushed the U.S. currency to an intraday high of 134.25 yen _ its highest level since hitting 134.95 yen on April 27, 1992.

Yen-buying by the Bank of Japan, Japan’s central bank, pushed the dollar lower, traders said.

Persistent weakness in Japanese stock prices prompted the initial bout of yen selling by investors, they said.

The Nikkei Stock Average fell 175.62 points, or 1.17 percent, to 14,781.22 points in the first hour of trading. On Monday, the first day of trading this year, the average lost 301.90 points, or 1.98 percent.

Tokyo stocks moved lower following a decline in Nikkei stock future contracts traded overnight on the Chicago Mercantile Exchange.

The broader Tokyo Stock Price Index of all issues listed on the first section fell 12.39 points, or 1.06 percent, to 1,154.24. The TOPIX closed down 8.40 points, or 0.71 percent Monday.

The yield on the benchmark No. 182 10-year Japanese government bond fell to 1.585 percent from 1.610 percent Monday, driving its price up to 109.70 from 109.52.

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