Key Stock Index Closes at Year’s High, Dollar Edges Higher
TOKYO (AP) _ Optimism over Japan’s economy sent the Tokyo Stock Exchange’s key index to a 1994 high closing for the third straight day today. The dollar edged higher against the yen.
The 225-issue Nikkei Stock Average gained 79.52 points, or 0.38 percent, closing at 21,053.11. The previous high close for this year was set Tuesday, when the Nikkei finished at 20,973.59, up 134.62 points, or 0.65 percent, from the previous day.
In today’s trading, the average was down 66 points on profit-taking early in the session after three consecutive sessions of gains, but waves of buying by both Japanese and foreign investors sent the index back up, dealers said.
″It’s trading that almost everyone took part in,″ said Toru Heianji, manager of the equity department at Toyo Securities.
Heianji said large-capital stocks, including autos, resources, oil, utilities and construction issues, led the way.
Investors are looking for Japan’s economy to head for recovery with an easing of business regulations and other stimulative steps, Heianji said.
The Japanese government has promised such measures at the end of June to help the nation pull out of a 3-year-old recession.
An estimated 700 million shares changed hands on the first section, up from Tuesday’s 533 million. It was the fourth straight day that volume topped 500 million shares. Advances outnumbered declines 613 to 419, with 158 issues unchanged.
The Nikkei’s recent gains came on active buying by foreign investors, but domestic investors also began joining them in the belief that Japan’s interest rates may remain low, a Nikko Securities dealer said.
Lower interest rates also tend to boost stock investment.
Japan’s official discount rate, the rate charged by the nation’s central bank for loans to commercial banks, now stands at a historic low of 1.75 percent.
The Tokyo Stock Price Index of all issues listed on the first section was up 11.08 points, or 0.66 percent, closing at 1,693.58. It had climbed 4.17 points, or 0.25 percent, to 1,682.50 the previous day.
Meanwhile, the dollar closed at 104.72 yen, up 0.34 yen from Tuesday’s close but below its overnight New York finish of 104.85 yen.
After opening at 104.74 yen, it ranged between 104.70 yen and 104.81 yen.
The dollar moved in a narrow range as players watched for developments on the Korean Peninsula, dealers said.
Although the market remains calm, growing international tension over North Korea’s nuclear program is a major potential dollar-supporting factor, they said.
The benchmark No. 157 10-year Japanese government bonds closed at 100.75 yen, down 0.13 yen from Tuesday’s close. Their yield rose by 0.160 percentage point to 3.990 percent.