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Dollar Higher, Stocks Slip

January 24, 1996

TOKYO (AP) _ The dollar was higher against the Japanese yen Wednesday, buoyed by positive reaction to Japan’s shrinking overall trade surplus. Stock prices slipped.

The dollar’s stability was boosted by the announcement that Japan’s overall trade surplus fell 11 percent last year, and its politically sensitive surplus with the United States plummeted 17 percent, said Tamotsu Kawamoto, a Tokai Bank trader.

The dollar was changing hands at 106.18 yen, up 0.54 yen from late Tuesday in Tokyo and also above its late New York trading overnight at 105.84 yen.

The dollar also was supported by a growing market anticipation about a possible cut in German interest rates, Kawamoto said.

The U.S. currency was supported overnight following remarks by a German central bank official Tuesday indicating a move to lower German interest rates.

On the stock market, the 225-issue Nikkei Stock Average briefly slipped below the 20,000 level at midmorning for the first time since January 4. That was caused by selloffs by foreign investors on growing uncertainties about the Japanese government’s plan to bailout the nation’s failed housing lenders.

Many players also stayed on the sidelines ahead of a Parliamentary debate later in the day on bad debts held by Japanese housing lenders, they said.

The Nikkei Stock Average lost 6.87 points, or 0.03 percent, to end morning trading at 20,074.05. On Tuesday, the average had shed 115.61 points, or 0.57 percent.

The Tokyo Stock Price Index of all issues listed on the exchange’s first section was down 1.79 points, or 0.11 percent, to 1,562.31. The TOPIX had lost 6.29 points, or 0.40 percent, the day before.

The benchmark 10-year Japanese government bond were sold at 111.11 yen, down 0.15 yen from Tuesday’s close. Its yield rose to 2.980 percent from 2.960 percent.

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