Dollar Rises, Stocks Down
TOKYO (AP) _ The dollar rose against the yen today, even though a closely watched Cabinet meeting produced no concrete measures to prop up the sagging U.S. currency. But disappointment about the meeting helped push share prices down.
The dollar closed at 101.98 yen, up 0.51 yen from Wednesday’s finish of 101.47 yen and above its overnight New York close of 101.60 yen. After opening at 101.30 yen, it ranged between 101.10 yen and 102.30 yen.
The dollar initially dipped to 101.18 yen when the meeting, held early today to discuss policies affecting the yen, did not produce any specific proposals.
But traders said the dollar rebounded on intervention by Japan’s central bank to slow its decline.
Players also were adjusting their positions after a recent splurge of yen- buying, they said.
The dollar has been falling since February, largely on the view that the United States favors a stronger yen as a measure to help cut its trade deficit. A stronger yen makes Japanese goods more expensive in the United States, while making U.S. products cheaper here.
On Monday, the dollar’s close of 101.25 yen was its lowest in Tokyo since modern exchange rates were set in the late 1940s. The dollar has fallen nearly 20 percent since early February.
Spot trading today rose to $8.466 billion from Wednesday’s $5.973 billion.
On the Tokyo Stock Exchange, the 225-issue Nikkei Stock Average closed at 20,687.47, down 85.71 points, or 0.41 percent, from Wednesday’s close of 20,773.18. It had slipped 68.80 points, or 0.33 percent, on Wednesday.
The Tokyo Stock Price Index of all issues listed on the first section ended at 1,664.76 points, down 11.10 points, or 0.66 percent. It had fallen 5.89 points, or 0.35 percent, to 1,675.86 Wednesday.
Volume on the first section was estimated at 250 million shares, down from 280 million Wednesday. Declines outnumbered advances 716 to 243, while 184 issues were unchanged.
Traders said the market’s major barometer began to slide as disappointed investors interpreted the Cabinet meeting as unhelpful in finding ways to stimulate the economy or stop the yen’s rise.
Katsumi Oshima, an analyst at Sanyo Investment Research, said investors were beginning to have doubts about the new government, a fragile coalition of seven parties.
″The government isn’t clearly in tune with the current economic situation,″ Oshima said. ″The market knows that immediate action is necessary.″
Phillipe Huber, a senior trader with UBS Securities, said the Nikkei likely will stay between support at 20,500 points and heavy selling pressure at 21,000.
But he said the Nikkei could drift toward 20,200 if no further incentives emerge to inspire buying.
The price of the No. 145 10-year Japanese government bonds closed at 108.69 yen, down 0.20 yen from Wednesday’s finish. The yield rose by 0.030 percentage point to 4.125 percent from 4.095 percent.