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Dollar Higher; Stock Prices Down

January 23, 1991

TOKYO (AP) _ The dollar rose against the yen in Wednesday morning trading in reaction to Iraq’s missile attack on Israel. Stock prices fell moderately.

The dollar was changing hands at 132.53 yen at late morning, up 0.88 yen from Tuesday’s close. It opened at 132.60 yen and ranged between 132.32 yen and 132.80 yen.

On the stock exchange, the 225-issue Nikkei Stock Average shed 143.37 points, or 0.61 percent, to close the morning session at 23,110.28. The index lost 98.54 points on Tuesday.

Oil prices were higher.

North Sea Brent crude for March delivery was traded at $21.65 a barrel at midday, up from its overnight close in London at $20.50.

Currency dealers said the Iraqi strikes on Kuwaiti oil facilities and the possibility of higher oil prices were making markets nervous.

Toru Kanai, a foreign exchange analyst with New Japan Securities Co., said the news of the missile attack on Israel inspired dollar buying because many market players had short, or oversold, dollar positions from earlier this week.

Atsushi Komatsu, a dealer with Fuji Bank, said, ″Given the (negative) state of U.S. economy, traders wanted to sell dollars, but refrained from doing so because of unstable conditions in the Middle East and the Soviet Union.″

The dollar is often seen as a safe investment in times of international crisis.

Dealers said U.S. Federal Reserve Board Chairman Alan Greenspan’s warning against lowering interest rates too much was supporting the dollar.

On the stock market, the Nikkei index moved lower on small-lot selling in thin trading discouraged by the yen’s weakness and declining bond prices.

″The stock market basically took a wait-and-see position following Iraq’s third missile attack on Tel Aviv,″ said Yoshio Inoue, an analyst with Wako Securities.

Gold opened at $383 a troy ounce, up from Tuesday’s close of $379.

In bond dealings, the price of the benchmark No. 119 10-year Japanese government bonds fell to 88.85 points from the previous day’s 88.95-point close. The yield rose to 6.900 percent from 6.880 percent.

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