Dollar Climbs, Stocks Fall on Brink of Deadline
TOKYO (AP) _ Mounting war fears sent the dollar climbing and stocks plunging hours before the United Nations deadline for Iraq to withdraw from Kuwait.
The dollar was changing hands at 136.65 yen at late morning, up 1.30 yen from Monday’s close. After opening at 136.15 yen, the dollar ranged between 136.05 and 136.65.
Japan’s financial markets were closed Tuesday for a national holiday.
The Nikkei Stock Average of 225 selected issues lost 725.80 points, or 3.12 percent, from Monday’s close to end the morning session at 22,487.43. It had declined 27.79 points Monday.
North Sea Brent crude oil for March delivery was traded at $28.70-$28.80 dollars a barrel in Tokyo.
Currency dealers said most market players remained on the sideline, awaiting the U.N. deadline for an Iraqi withdrawal.
″The dollar edged up amid a wait-and-see mood,″ said Kan Sugita, a dealer with the Bank of Tokyo.
Toru Kanai, a foreign exchange analyst with New Japan Securities Co., said the market has assumed there will be fighting ″so there will not be panicky trading if there is a war.″
On the stock market, the Nikkei index started broadly lower on growing war concerns.
″With increasing fears of possible armed conflict in the Gulf, there were few buyers,″ said Takashi Morinaga, an analyst with Okasan Securities Co. ″Every one is refraining from making major moves for now.″
Finance Ministry officials confirmed Wednesday that Japan will not close its stock, foreign exchange or other financial markets if war breaks out.
The ministry has said it would inject capital into the stock market to avoid a sudden drop. It also will strengthen measures to curb excessive fluctuations in stock price.
In bond dealings, the price of the benchmark No. 119 10-year Japanese government bonds slipped to 88.31 points from Monday’s 88.71-point close. The yield rose to 7.010 percent from 6.925 percent.