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Dollar Up, Stocks At Record High

December 28, 1988

TOKYO (AP) _ The dollar gained against the Japanese yen today, while Tokyo’s leading stock index closed the last trading day of the year, a ″festival market,″ at a record high.

The dollar opened at 125.17 yen and closed at 125.27 yen, up 0.47 yen from Tuesday’s close of 124.80 yen.

An exchange dealer at the Bank of Tokyo said the dollar’s strength here followed a dollar-buying drive in New York ″based on actual demand.″ In New York, the dollar closed at 124.92 yen on Tuesday.

Another exchange dealer said trading was relatively slow because many dealers are on year-end vacations.

On the Tokyo Stock Exchange, the Nikkei Stock Average of 225 selected issues, which reached the 30,000-level Tuesday for the second time ever, added another 108.07 points, or 0.36 percent, closing at a record 30,159.00 points.

Today’s session was only a half day, ending with blue- and gray-suited traders jamming the exchange floor to loudly applaud the end of 1988 trading. The market will reopen on Jan. 4 with another half-day session.

Traders said it is the Japanese market’s tradition to try to end the year in a bullish mood.

″It makes us and investors feel like the market is going to open strong after the New Year,″ said Ichitaro Watanabe, a dealer at Nikko Securities Co. ″Today’s market is like a festival market.″

Wantanabe also said major brokerages customarily push share prices up at the year-end.

The market’s key indicator first broke the 30,000-level on Dec. 7, when it closed at 30,050.82, but it slipped back the following day on profit-taking. It regained the 30,000-level Tuesday, when it closed at 30,050.93 points.

Analysts said the market outlook was favorable because Japan’s brisk economic growth is expected to continue through mid-1989.

″My estimate is the current economic growth will continue at least until the middle of next year, and then it may show a little slowdown,″ said Mike Morizumi at Merrill Lynch’s Tokyo office. ″But unless some dramatic changes occur ... the market’s bullishness will probably continue.″

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