Dollar Down, Share Prices Higher
TOKYO (AP) _ The dollar closed sharply lower against the Japanese yen on Friday, while prices on the Tokyo Stock Exchange rose slightly.
The dollar closed at 140.25 yen, down 1.40 yen from Thursday’s close of 141.65 yen. The low for the day’s trading was 140.00 and the high was 141.00. It was the lowest closing value for the dollar since 141.55 yen on Oct. 25, 1989.
The Nikkei Stock Average of 225 selected issues recovered to close at 23,962.07, up 150.16 points, or 0.63 percent. Estimated volume of trading for first-section shares was 440 million shares.
In bond dealings, the yield of the benchmark No. 119 10-year Japanese government bonds finished the day almost even with Thursday’s level, closing at 8.250 percent, up slightly from Thursday’s close of 8.245 percent. The price stood at 82.46 points, down from 82.48.
Currency dealers said the dollar’s low opening followed its overnight downswing in New York over speculation that U.S. monetary authorities might push interest rates lower.
But short-covering pulled the dollar back from the brink of the psychological barrier of 140 yen to the dollar, said Tadashi Sazaki, assistant general manager of the foreign exchange and international treasury division of the Mitsui Taiyo Kobe Bank.
Analysts said the market’s attention is focused on the U.S. Labor Department’s release Friday of unemployment statistics for August on the assumption that the Federal Reserve Board, the nation’s central bank, will respond by pushing interest rates lower to give the economy a boost.
Kan Sugita, a dealer with the Bank of Tokyo, said the early dollar trading was brisk in both buying and selling. ″But I don’t think the dollar will soon move below the 140-yen level″ before the release of the unemployment data, Sugita said.
The stock market started slowly with mixed small-lot buying and selling in a favorable reaction to the yen’s appreciation against the dollar, though some investors remained cautious against rising oil prices and an overnight decline on Wall Street, dealers said.
″Every investor is very, very negative,″ said Hidetada Yoshida of Kidder Peabody. Traders are worried about what kind of a deal might be cut at the weekend summit of President Bush and Soviet leader Mikhail Gorbachev. ″If the ceremony fails to get agreement, the market will be disappointed,″ he said.
Arbitrage trading and the rapid fall on the bond market, heralding higher interest rates, also drove the market down, he said.