TOKYO (AP) _ The benchmark 225-issue Nikkei Stock Average took a dive Friday, but traders said the fall was mainly due to technical reasons. The dollar rose against the yen.
The Nikkei index closed at 18,252.68 points, down 706.64 points, or 3.7 percent, from Thursday. On Thursday, it closed down 127.30 points, or 0.67 percent.
The dollar was trading at 105.68 yen at 3 p.m. (2 a.m. EDT) Friday, up 0.90 yen from 104.78 yen late Thursday but slightly below its late New York level of 105.73 yen overnight.
On the Tokyo stock market, prices started higher as investors were cheered by the Dow’s 169.09-point rise Thursday, leaving the New York index at 10,844.05 at the market’s close.
But investors later began selling industrial stocks which will be removed from the Nikkei index’s stocks starting April 24.
Thirty of the index’s stocks will be replaced to better reflect changes in Japan’s economy, the Nihon Keizai newspaper, a major Japanese financial daily and the administrator of the index, said earlier this month.
Removal of stocks from the index tends to lower their prestige and makes them less attractive to investors.
``People were selling not only the old components that will leave the index, they were also selling those that will stay in the index,″ said Chuck Lambert, market analyst at Jardine Fleming Securities.
The broader Tokyo Stock Price Index of all issues listed on the first section rose, showing that overall market sentiment was not bad and that much of the selling was technical.
The TOPIX gained 5.12 points, or 0.31 percent, to finish at 1,634.12 points. The index closed up 9.18 points, or 0.56 percent, the day before.
In currency dealings, the plunge in the Nikkei spurred a small burst of dollar-buying. But traders said the impact on currency trading of the Nikkei’s drop was limited, noting that the TOPIX held steady.
In other currencies, the euro was traded at 99.31 yen, up from 98.30 yen late Thursday.
The yield on the benchmark 10-year Japanese government bond stood at 1.7300, down from 1.7350 percent Thursday. Its price rose to 101.46 from 101.42.