Stocks Drop, Dollar Rises
TOKYO (AP) _ Share prices fell today on the Tokyo Stock Exchange after surging a day earlier, while the dollar rose against the Japanese yen.
The 225-issue Nikkei Stock Average lost 113.00 points, or 0.47 percent, closing at 23,995.76. Trading was moderate, with volume estimated at 320 million shares on the first section, about the same as Monday’s.
The index drifted up in morning trading after strong showings by the New York and London markets prolonged momentum from Monday’s rise of 817.80 points, or 3.51 percent.
But the index fell in the afternoon in what traders said was a normal correction to the previous day’s surge.
Share prices rose Monday after the Bank of Japan, the nation’s central bank, cut its official discount rate by half a percentage point to 5.5 percent to help sustain economic growth.
Today, ″the market sort of caught up with itself,″ said Paul Migliorato of Jardine Fleming Securities Ltd.
Financial stocks did well Tuesday, he said. But overall, declining issues outnumber gainers 493 to 451, with 193 unchanged.
The yen’s weakness also helped bring the index down, said Yoshiro Inoue, an analyst at Nomura Securities.
The dollar closed at 138.50 yen, up 0.66 yen from Monday’s close and above its overnight close of 138.42 yen in New York. It opened at 138.31 yen and ranged between 138.25 yen and 138.58 yen.
Spot trading totaled $5.92 billion, down from $7.75 billion Monday.
″The market was very quiet. There is no incentive for Japanese players in this recent tight range,″ said Makoto Arataki, a customer dealer at the Bank of Tokyo.
Traders said the dollar continued to gain mostly on optimism about the U.S. economy.
The dollar was bought on a report from the National Association of Purchasing Managers that indicated the American economy is pulling out of recession, traders said.
″The feeling for the dollar is still bullish,″ said Sean Sirois, manager of treasury for the Toronto Dominion Bank.
Players are still wary of the German mark, fearing fallout from unrest in Yugoslavia and a possible tightening of German tax laws.
But worry that central banks will intervene if the dollar rises too much against other currencies is holding down the dollar’s gains, they said.
In bond dealings, the benchmark No. 129 10-year Japanese government bonds fell to 98.03 points, down from Monday’s finish of 98.13 points. Their yield rose to 6.760 percent from 6.740 percent.