Wall Street Rally Boosts Dollar Against Yen, Japanese Stocks
TOKYO (AP) _ Enthusiasm over a 50-point rise on Wall Street helped boost the Nikkei Stock Average more than 129 points today and push the dollar above Friday’s record low closing in Tokyo, trading officials said.
The dollar was up 0.20 yen today, closing at 126.65 yen, after opening at 127.25 yen and ranging between 126.50 yen and 127.30 yen.
The Nikkei Stock Average closed at 22,956.84 points, after surging briefly during the day above the 23,000 level.
Friday’s 50-point advance in the Dow Jones industrial average of 30 stocks in New York ″helped put investors here at ease psychologically″ at the start of today’s trading in Tokyo, said Minoru Maeda, an equity researcher at Nomura Securities.
Michio Katsumata of Nomura Securities said many investors believe the dollar has ″bottomed out″ and will stabilize near the current level, also helping to boost stock prices.
On Friday, the dollar dipped at one point to 125.55 yen, its lowest level against the yen since modern exchange rates were set up in the late 1940s. Friday’s closing of 126.45 yen represented a decline of 6.33 yen over eight trading days, in which the dollar closed at record lows on seven days.
Tomoshige Kakita, senior deputy general manager of the treasury division at Mitsui Bank Ltd., said about 80 percent of the dollar’s strength today could be attributed to technical factors.
He said those factors included a market reaction to the overselling of dollars on Thursday and Friday following a statement by Martin Feldstein, former chairman of the president’s Council of Economic Advisers, that the dollar could fall to as low as 100 yen over the next two years.
Kakita also said the market is cautious about a possible statement from the Group of Seven industrial nations, after the U.S. Congress approves a budget deficit-cutting plan.
Sato Yamashita of Goldman Sachs said investors were not participating aggressively in the stock market, but the slight improvement in the dollar helped boost trading.
On Friday in New York, the Dow Jones average climbed 50.90 to 1,975.30, closing out the week with a gain of 108.26. That surpassed the record weekly point rise of 100.30 set the previous week.