Dollar Falls, Stocks Rebound
TOKYO (AP) _ The dollar fell today against the Japanese yen, backing off its highest levels in nearly seven months, while share prices rebounded on the Tokyo Stock Exchange.
The dollar closed at 139.13 yen, down 1.47 yen from Monday’s close of 140.60 yen and also below its finish of 139.35 yen Monday in New York.
After opening at 139.05 yen, it ranged between 138.60 yen and 139.20 yen. Spot trading totaled $10.54 billion, up from Monday’s $10.19 billion. On the three previous trading days, the dollar had gained a total of 2.20 yen.
In today’s early trading, the dollar hit its low point against the yen because of cross-trading that saw the German mark rise against the American currency, said Masaru Furusawa, a dealer with Fuji Bank.
″The mark’s rise was helped by speculation that Germany’s central bank will raise its key interest rate in its board of directors’ meeting slated for Thursday,″ Furusawa said.
Buying by Japanese importers, coupled with traders’ position adjustments, helped the dollar recover somewhat, he added.
Furusawa said traders also were cautious about dollar buying because they expected the March employment report due Friday to show a worsening in U.S. unemployment.
On the stock exchange, the Nikkei Stock Average of 225 selected issues gained 244.60 points, or 0.94 percent, closing at 26,252.00. The average fell 284.64 points on Monday.
Volume on the first section totaled 400 million shares, up from Monday’s 300 million shares.
The index started lower in reaction to a decline Monday on Wall Street, but turned around as the yen’s recovery against the dollar encouraged investors, stock dealers said.
″Also a renewed expectation of lower (domestic) interest rates boosted buying of large-capital issues,″ said an analyst with Kankaku Securities, speaking on condition of anonymity.
Mitsubishi Bank, a major Japanese commercial bank, said today it is lowering its short-term prime rate by 0.375 percentage points to 7.875 percent, effective next Monday.
In bond dealings, the price of the benchmark No. 129 10-year Japanese government bonds rose to 98.51 points from Monday’s 98.46 points. Their yield fell to 6.665 percent from 6.675 percent.