Stocks Finish Higher, Dollar Lower
TOKYO (AP) _ Share prices on the Tokyo Stock Exchange bounced back moderately Wednesday, while the dollar finished lower against the Japanese yen.
The 225-issue Nikkei Stock Average rose 140.71 points, or 0.85 percent, closing at 16,600.26. The average shed 197.52 points, or 1.19 percent, on Tuesday.
The Tokyo Stock Price Index of all issues listed on the first section gained 2.98 points, or 0.23 percent, to 1,274.13. The index fell 16.39 points, or 1.27 percent, the previous day.
An estimated 190 million shares changed hands, up from Tuesday’s 169 million shares.
The dollar closed at 124.00 yen, down 0.17 yen from Tuesday’s close and also lower than its overnight New York finish at 124.10 yen. After opening at 123.88 yen, it ranged between 123.80 yen and 124.25 yen.
As of 3 p.m. (2 a.m. EDT), the benchmark No. 129 10-year Japanese government bonds stood at 106.63 points, unchanged from Tuesday’s close. Their yield remained unchanged at 5.190 percent.
Stock traders said the Nikkei’s rebound came on buying in the last 20 minutes of trading following rumors about a merger of Japanese paper- manufacturing companies. Until then, the average remained in the negative column.
Stock traders said share prices continued to fall on a spate of negative factors, including an overnight fall on Wall Street, the financial troubles of a construction firm and speculation of reviewing capital gain taxes.
″Bad factors combined to push prices down amid a wait-and-see mood among investors watching the G-7 summit,″ said Hirotsugu Ishii, an analyst with Yamatane Securities.
Royal Construction Co., a medium-sized construction firm based in Tokyo whose stocks were placed on over-the-counter trading, said Tuesday the company will apply to a Tokyo court for protection against its creditors after failing to honor a bill Monday, a company official said. The Royal official, who spoke on condition of anonymity, said the company’s outstanding debts totaled about $153 million, attributed mainly to delays of receiving money spent in construction.
Local news reports have said Japan’s monetary authorities are considering a review of the capital gains tax charged on large-lot transactions.
The dollar continued its gradual slide against the Japanese yen, but some traders bought it back on short covering.
A Fuji Bank dealer said the dollar’s direction was unclear as market participants were waiting for an outcome of the Munich summit of the Group of Seven major industrialized nations.
The dollar’s decline was accelerated early in the session by comments by U.S. Treasury Secretary Nicholas Brady late Tuesday on U.S. television. Brady said he was not bothered by the dollar’s decline against the German mark, and he said the U.S. Federal Reserve has room to maneuver interest rates even lower.