Dollar Falls Despite Central Bank Intervention
TOKYO (AP) _ The dollar fell against the yen despite intervention by Japan’s central bank today, while prices fell on the Tokyo Stock Exchange.
The dollar closed in Tokyo today at 96.76 yen, down 0.64 yen from Monday’s close and also below its overnight New York finish of 97.13 yen.
The stock market, down for its third consecutive session, was generally quiet as traders awaited Thursday’s issue of new shares in the government’s Japan Tobacco Inc. and Friday’s release in Washington of new gross domestic product figures.
Currency dealers said the Bank of Japan was buying dollars all day, trying to keep the dollar from reaching new historic lows. The dollar closed at 96.68 yen Friday, its lowest finish since modern exchange rates were set after World War II.
The central bank does not comment on its intervention activities, but the strong yen has put a heavy strain on Japan’s manufacturers, whose goods become more expensive overseas as the yen rises.
Trade minister Ryutaro Hashimoto has urged other Group of Seven industrial nations to cooperate in stabilizing the yen’s volatile exchange rates.
Yet European central banks appeared reluctant to intervene at current dollar levels, Shoichi Handa of First National Bank of Chicago said.
″Speculators would like to try the down side until the European central banks appear in the dollar-mark market,″ he said, referring to the German currency.
Gilberto Suzuki of Citibank said he didn’t expect the U.S. government would try to prop up the dollar the U.S. bond or stock markets fell sharply.
Spot trading today totaled $6.411 billion, well above Monday’s $3.408 billion but less than Friday’s $8.86 billion. The U.S. currency ranged between 96.73 yen and 97.03 yen after opening at 96.93 yen.
On the stock market, the 225-issue Nikkei Stock Average fell 120.22 points, or 0.61 percent, to 19,732.15. On Monday, the average had fallen 46.71 points, or 0.23 percent, to 19,852.37.
The Tokyo Stock Price Index of all issues listed on the first section was down 6.79 points, or 0.43 percent, to 1,568.40. On Monday, it had slipped 0.24 percent, or 3.75 points, to 1,575.19.
Volume on the first section of the Tokyo Stock Exchange was estimated at 220 million shares, up from 181.78 million Monday. Declines outnumbered advances 632 to 301, while 240 issues were unchanged.
Investors were watching exchange rate movements, dealers said. An overnight fall in stock prices on Wall Street also discouraged some investors.
The benchmark No. 164 10-year Japanese government bonds closed at 95.86 yen, up just .03 yen from Monday’s close. Their yield fell by 0.005 percentage points to 4.750 percent.