Dollar Up, Nikkei Declines Again
TOKYO (AP) _ The dollar firmed against the yen in Tokyo today, while share prices on the Tokyo Stock Exchange declined for the sixth straight trading day.
The dollar closed the week at 150.75 yen, up 0.64 yen from Thursday’s 150.11-yen finish. It opened at 150.40 yen and ranged between 150.32 yen and 150.80 yen.
The U.S. currency has kept an upward trend in the last seven trading days, gaining a total of 3.50 yen from the closing of 147.25 yen on July 18.
Spot transactions today totaled $9.509 billion, down from Thursday’s $10.112 billion.
The benchmark Nikkei Stock Average of 225 selected issues fell 506.27 points, or 1.61 percent, to 30,863.48. The index had shed 331.52 points on Thursday.
It was the lowest closing since May 2, when the index finished at 30,173.64.
The index now has lost a total of 2,192.14 points, or 6.63 percent, in six sessions, compared to the closing of 33,055.62 on July 19.
Friday’s volume on the first section was estimated at 450 million shares, up from 330 million shares on Thursday.
In bond dealings, the widely watched No. 119 10-year Japanese government bond was quoted at 85.30 points as of 4:00 p.m., down from Thursday’s close of 85.62 points. The yield was 7.545 percent, up from 7.500 percent.
Currency dealers said the weakness of the Tokyo stock market and the Japanese government bond’s slip were the main factors for the dollar’s gain this week.
″Besides, the dollar usually is bought here as a safe haven in times of international tension,″ said Toshiyuki Nishiguchi, an analyst with Daiwa Securities. He referred to the dollar’s gain and decline in share prices in Tokyo in the wake of tension in the Middle East between Iraq and Kuwait.
″Uncertain prospects for interest rates and the weakness of the Japanese government bonds were other factors,″ Nishiguchi said.
Akihiko Kagawa of Bank of Tokyo said, ″The exchange market today is more concerned about the declining share prices than any other factors.″
Share prices plunged to a 2 1/2 -month low in response to higher interest rates on the bond market, Kagawa said.
The benchmark government bond has lost 0.84 points from 86.14 last Friday, when the yield stood at 7.385 percent.
Japan’s discount rate and long term prime rate are one of the lowest among industrialized countries, and the country has been under pressure from its trading partners to raise the rates.
Higher interest rates tend to make a country’s stock market less attractive to investors.