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Dollar Up, Stocks Lower

October 23, 1996

TOKYO (AP) _ The dollar rose against the yen today, while prices on the Tokyo Stock Exchange declined for the third consecutive day.

By late afternoon, the dollar was trading at 112.74 yen, up 0.27 yen from late Tuesday in Tokyo and also above its late New York rate of 112.20 yen Tuesday.

The dollar sank at one point to 112.04 yen on rumors that the United States might change its stance supporting a stronger dollar. In the afternoon, however, the dollar rebounded on Japanese investor buying, said Tamotsu Kawamoto, a Tokai Bank trader. It rose as high as 112.87 yen.

The currency also was indirectly supported by selling of yen to buy German marks, Kawamoto said.

The U.S. currency had slipped in New York on Tuesday on an unconfirmed report suggesting that the Clinton administration was worried about the yen’s decline. A weaker yen makes Japanese products cheaper and more competitive in the United States, and American products more expensive in Japan.

On the stock market, prices fell. Growing pessimism over the nation’s economy prompted selling. The market anticipates that the nation’s economy will falter toward the end of the year without further stimulus policies.

The 225-issue Nikkei Stock Average fell 41.53 points, or 0.20 percent, closing at 21,082.15. On Tuesday, the average had shed 179.27 points, or 0.84 percent, following a 309.35-point decline Monday.

The Tokyo Stock Price Index of all issues listed on the first section was down 7.08 points, or 0.45 percent, to 1,576.73. It had fallen 13.25 points, or 0.83 percent, the previous day.

Volume on the first section of the Tokyo Stock Exchange was estimated at 270 million shares, down slightly from Tuesday’s 278.24 million. Declines outnumbered advances 744 to 284, with 203 issues remaining unchanged.

The benchmark No. 182 10-year Japanese government bond closed at 102.22 yen, up from Tuesday’s finish of 102.18 yen. Its yield fell to 2.690 percent from 2.695 percent.

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