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Key stock indexes rise for second day, dollar surges on trade figures

July 17, 1997

TOKYO (AP) _ The Tokyo Stock Exchange’s main indexes advanced in active trading today for the second consecutive day, bolstered by a record high close on Wall Street overnight and the dollar’s surge against the yen.

The Nikkei Stock Average rose 160.51 points, or 0.79 percent, closing at 20,519.25. On Wednesday, the index had gained 289.33 points, or 1.44 percent.

Following the Dow Jones industrial average’s climb through the 8,000-point mark Wednesday, traders said share prices in Tokyo advanced on continued strength in high-technology and banking issues.

Mayumi Araki, equity manager with Daiwa Securities, said investors continued to buy stock in banks, non-life insurance companies and brokerages, expecting them to benefit from Japan’s coming financial deregulation.

The Japanese government is moving to cut red tape and promote competition under its ``Big Bang″ deregulation program in coming years.

On Tuesday, Long-Term Credit Bank of Japan and Swiss Bank Corp. announced a new partnership aimed at taking advantage of the deregulation.

The dollar’s strength against the yen also prompted investors to buy export-oriented Japanese blue chips. A higher dollar allows those companies to price their products more competitively overseas.

The Tokyo Stock Price Index of all issues listed on the first section was up 8.21 points, or 0.53 percent, to 1,553.14. The TOPIX had climbed 23.04 points, or 1.51 percent, the previous day.

An estimated 500 million shares changed hands on the first section, down from 517 million Wednesday. Despite the indexes advance, declining shares outnumbered advances 629 to 467, with 142 issues unchanged.

In late afternoon, the dollar was trading at 116.02 yen, up 0.39 yen from late Wednesday in Tokyo and also above its late New York rate of 115.52 yen overnight. It ranged between 115.20 yen and 116.30 yen in today’s trading.

The dollar strengthened after figures released early today showed a smaller than expected Japanese trade surplus in June.

The Finance Ministry said the June surplus totaled $8.05 billion, which was below economists’ predictions of around $8.6 billion.

Nevertheless, traders said the large Japan-U.S. trade gap will continue to weigh on the dollar.

Profit-taking brought the dollar down somewhat from its intraday high of 116.30 yen, traders said.

The yield on the benchmark No. 182 10-year Japanese government bond fell to 2.275 percent from 2.280 percent late Wednesday. Its price rose to 104.99 from 104.95.

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