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Stock Index Drops Further, Dollar Keeps Rising

March 12, 1992

TOKYO (AP) _ The Tokyo Stock Exchange’s key index, already at a 17-month low, slipped further in light trading today, while the dollar rose to a nearly six-month high against the Japanese yen.

The 225-issue Nikkei Stock Average fell 30.26 points, or 0.15 percent, closing at 20,561.88. On Wednesday, the average fell to what was then its lowest close since Oct. 1, 1990, when it had finished at 20,221.86.

The Tokyo Stock Price Index of all issues listed on the first section, which on Wednesday fell 16.31 points, or 1.10 percent, lost another 6.27 points, or 0.42 percent, to 1,472.21.

An estimated 280 million shares changed hands, up from Wednesday’s 269 million. Declining issues outnumbered gainers 557 to 401, while 161 issues remained unchanged.

The Nikkei average was down 244 points at one point in the morning because of arbitrage selling linked to the expiration today of March futures, said Yutaka Negishi, a trader with Taiheiyo Securities.

″After a round of selling, there was buying back in the afternoon centering on large-capital, high-tech issues,″ Negishi said.

A new stock scandal that forced the president of Daiwa Securities to resign Wednesday was dampening trading, other traders said.

Masahiro Dozen stepped down to take responsibility for questionable trading practices that Daiwa says will force it to pay up to 85 billion yen ($636 million) to affected clients.

″Investors think more such cases could emerge soon,″ said Kiyonari Toyokawa of Kankaku Securities.

The dollar closed at 134.00 yen, up 0.30 yen from Wednesday’s close and its highest finish since 134.72 yen last Sept. 20. In New York, the U.S. currency finished overnight at 133.40 yen.

In Tokyo, it now has gained 2.37 yen in the last four days.

After opening at 133.55 yen, it ranged between 133.50 yen and 134.20 yen. Spot trading totaled $7.10 billion, down from Wednesday’s $11.19 billion.

Traders have said dollar-buying was based largely on optimistic views about the U.S. economic recovery.

Yasushi Mieno, governor of the Bank of Japan, told a news conference Thursday that he and other central bank officials who met in Switzerland felt that optimism in financial markets about the U.S. recovery was not entirely in keeping with the U.S. economy’s recent performance.

The benchmark No. 129 10-year Japanese government bonds finished at 105.31 points, down from Wednesday’s 105.37-point close. Their yield rose to 5.445 percent from 5.435 percent.

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