Dollar Weakens, Stocks Gain Moderately
TOKYO (AP) _ The dollar closed lower against the Japanese yen Monday on renewed speculation about lower U.S. interest rates, while share prices finished moderately higher.
The dollar closed at 121.02 yen, down 0.53 yen from Friday’s close of 121.55 yen. It opened at 121.20 yen after finishing Friday’s New York trading at 121.80 yen and ranged between 120.73 yen and 121.34 yen.
Haruhiko Hori, an exchange dealer with Sakura Bank, said the dollar was under selling pressure after U.S. Federal Reserve Board Chairman Alan Greenspan indicated that U.S. interest rates might be cut before the November presidential election.
Greenspan told a news conference Saturday that election-year politics will not keep the central bank from cutting interest rates again if needed to stimulate the economy.
But Hirotaka Takeda, a dealer with Daiwa Bank, said he did not expect much yen-buying because of growing expectations that Germany will ease its interest rates.
Traders are watching the outcome of the German central bank’s regular board meeting Thursday, where monetary policy in Germany will be discussed, Takeda said.
Lower interest rates make a nation’s currency less attractive to investors.
Meanwhile, the 225-issue Nikkei Stock Average gained 242.23 points, or 1.42 percent, closing at 17,302.23 points. The average fell 275.73 points, or 1.59 percent, on Friday.
The Tokyo Stock Price Index of all issues listed on the first section closed at 1,309.33, up 10.68 points, or 0.82 percent. On Friday, the TOPIX shed 6.04 points, or 0.46 percent.
Stock traders said the Nikkei average rebounded on index-linked buying and small-lot purchases by foreign investors but they said a lack of fresh incentives left many investors on the sidelines.
The yield on benchmark No. 145 10-year Japanese government bonds stood at 4.870 percent from Friday’s 4.840-percent finish. Their price fell to 104.06 points from 104.26 points.