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Dollar Hits Highest Level Against Yen Since October 1987 Crash

May 18, 1989

TOKYO (AP) _ The U.S. dollar finished at its highest level against the Japanese yen since the October 1987 stock market crash, while share prices on the Tokyo Stock Exchange fell.

The Nikkei Stock Average of 225 selected issues, a 66.00-point gainer the previous day, dropped 136.12 points, or 0.40 percent, to finish trading at 33,856.33.

The dollar closed at 138.88 yen, up 1.18 yen from Wednesday’s 137.70-yen finish. Opening higher at 139.45 yen, the currency moved between 138.60 yen and 139.48 yen.

Traders said Japanese investors sold the yen and West German marks in favor of the dollar as soon as trading began, following a similar overnight trend in overseas markets.

The dollar was bolstered by a U.S. government report Wednesday showing the nation’s trade deficit fell to $8.86 billion in March from a revised $9.82 billion in February, traders said.

The Bank of Japan intervened several times, taking the dollar off its opening highs.

On the stock exchange, the Nikkei’s decline was mainly due to the yen’s decline and the marked improvement in the U.S. trade deficit, Nomura Securities’ Yoshiro Inouye said.

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