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Tokyo Stocks Higher at Midday

May 18, 1999

TOKYO (AP) _ The dollar remained higher against the yen at midday Tuesday ahead of a meeting of the U.S. Federal Reserve’s policy-making committee. Japanese stocks advanced.

The dollar bought 123.42 yen at midday, up 0.28 yen from late Monday in Tokyo and also above its late New York level of 123.49 yen.

The benchmark 225-issue Nikkei Stock Average rose 113.47 points, or 0.69 percent, ending the morning session at 16,534.49. On Monday, the average shed 389.37 points, or 2.3 percent.

In currency dealings, the dollar posted moderate gains against the Japanese currency as players waited to see if the Fed on Tuesday would signal any bias toward tightening monetary policy in its Open Market Committee meeting, traders said.

``The consensus seems to be that the Fed won’t take any action this time,″ Kazuo Watanabe, said deputy general manager of the treasury department at Sumitomo Bank. He said the dollar could face selling if markets confirmed that there isn’t any significant change, however.

The Bank of Japan’s policy board is also meeting Tuesday, but with no expectation or fear of a change in monetary policy, traders said.

In other currencies, the euro was traded at 131.94 yen at midday, up from 131.27 yen late Monday in Tokyo.

On the stock market, the dollar’s stability against the yen prompted buying from exporters who can benefit their overseas earnings. Investors were also taking advantage of the relative cheapness of shares in the high-technology sector, traders said.

But most investors were retreating to the sidelines as they waited for the outcome of the FOMC meeting.

The broader Tokyo Stock Price Index of all issues listed on the first section was up 9.62 points, or 0.73 percent, to 1,332.05. The TOPIX closed down 25.02 points, or 1.9 percent, the day before.

In New York, the Dow Jones industrial average was down 59.85 points to 10,853.47 at Monday’s close.

The yield on the benchmark 10-year Japanese government bond rose to 1.235 percent from Monday’s finish of 1.230 percent, driving its price down to 102.37 yen from 102.42 yen.

Update hourly