Dollar Gaims Further, Stocks Down
TOKYO (AP) _ The dollar gained ground further against the Japanese yen Tuesday, while share prices fell sharply.
The dollar closed at 134.35 yen, up 1.35 yen from Monday’s close of 133.00 yen. After opening at 134.33 yen, the currency ranged between 133.50 yen and 134.55 yen.
The Nikkei Stock Average of 225 selected issues shed 863.38 points, or 3.80 percent, closing at 21,862.61. The index gained 271.36 points on Monday.
In bond dealings, the price of the benchmark No. 119 10-year Japanese government bonds slipped to 86.68, down from Monday’s close of 86.81. Their yield rose to 7.345 percent from 7.315 percent.
Currency traders said the dollar’s strength followed its advance Monday in New York, where it closed at 134.73 yen, up from 132.50 late Friday.
″The dollar traded around 134 yen, though profit-taking and selling by exporters prodded the currency slightly lower,″ a dealer with Tokai Bank said.
Toru Kanai, a foreign exchange analyst with New Japan Securities, said the dollar is expected soon to reach the 135-yen level with annual dollar demand in December from travelers and trading houses.
Kanai cited comments from Defense Secretary Dick Cheney on Monday expressing pessimism about the effectiveness of economic sanctions against Iraq as yet another factor prompting the dollar’s strength.
News indicating continuing tensions in the Persian Gulf generally prompts buying of the dollar, which is seen as a safe investment in times of international crisis.
On the stock market, the Nikkei index started lower as investors were discouraged by the declining yen and bond prices. A decline in Japan’s auto sales also hurt stocks, said Koji Shimazu of Universal Securities.
The Japan Automobile Dealers’ Association said Monday that sales of cars, trucks and buses fell 2.3 percent in November from the same month of 1989, the first such decline in 21 months.