Dollar Surges Sharply Against Yen
TOKYO (AP) _ The dollar surged sharply against the yen Friday, as market players sought a safe investment after the U.N. Security Council adopted a resolution to permit the use of force to drive Iraq from Kuwait.
The weaker yen and possibility of war in the Middle East helped push share prices down, dealers said.
The dollar closed at 132.75 yen, up 2.60 yen from Thursday’s close of 130.15. After opening at 133.70 yen, it ranged from 132.40 to 133.85 yen in active trading totaling $18.44 billion.
The dollar is traditionally seen as a safe investment in times of international tensions, while the yen is weakened by possibility of war in the gulf because Japan imports virtually all its oil.
The dollar’s jump followed its overnight advance in New York, where it closed at 133.25 yen as investors anticipated the U.N. decision.
But buying slowed after the dollar hit the mid-133-yen levels and a move to buy back the yen resurfaced, traders said.
″There is still a fundamental sense that the American economy is in bad shape,″ said Yoshiyuki Kawai, a foreign exchange dealer at the Tokai Bank.
On the stock market, the 225-issue Nikkei Stock Average closed at 22,454.63 points, down 257.97 points or 1.14 percent from Thursday’s finish of 22,712.60 points.
Volume on the first section was 320 million shares, up from 300 million shares Thursday.
Takuo Futamura of Sanyo Securities said the market’s bearish sentiments in the face of Middle East tensions resembled the way share prices drooped during Emperor Hirohito’s illness before his death in January 1989.
Investors are also wary of the declining trend in Japan’s economy, he said.
″We see severe times ahead,″ said a dealer at Cosmo Securities, who spoke on condition of anonymity.
In bond dealings, the price of the benchmark No. 119 10-year Japanese government bonds rose to 86.31 points as of 5 p.m. (3 a.m. EST) from Thursday’s close of 86.11 points. Their yield fell to 7.425 percent from 7.480 percent.