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Stocks Fall, Dollar Lower in Tokyo

December 29, 1997

TOKYO (AP) _ Tokyo stocks dropped early Monday on continued worries about the health of Japan’s economy and the stability of its financial system. The U.S. dollar was lower against the yen.

The benchmark 225-issue Nikkei Stock Average lost 259.84 points, or 1.76 percent, to 14,542.76 in the first 30 minutes of trading. On Friday, the average shed 497.50 points, or 3.25 percent.

Trading was thin because there were few investors in the market ahead of the New Year holidays, traders said.

Traders said investors, rocked by a string of Japanese corporate failures in recent months, were worried that more Japanese companies could face insolvency in the coming months.

Among companies that went bankrupt recently were Yamaichi Securities Co., Japan’s fourth-largest brokerage, and Nitto Kogyo Co., a major golf course management firm, which applied for a court-mediated settlement with creditors last week.

The Tokyo Stock Price Index of all issues listed on the first section was down 11.94 points, or 1.04 percent, to 1,131.65 points. The TOPIX closed down 18.64 points, or 1.60 percent, on Friday.

Meanwhile, the dollar moved lower against the yen in Tokyo following comments, by Eisuke Sakakibara, senior finance ministry official, that Japan would take decisive action to support its currency.

``We are ready to intervene in such a way that it will surprise the markets,″ Sakakibara, vice minister for international affairs in the Ministry of Finance, said during a Japanese television program Sunday.

The U.S. dollar cost 129.94 yen in early trading, down 0.30 yen from late Friday and also below its late New York rate of 130.41 yen on Friday.

The yield on the benchmark No. 182 10-year Japanese government bond stood at 1.640 percent, nearly unchanged from its Friday’s finish. Its price edged lower to 110.35 yen from 110.36 yen.

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