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Shares Up, Dollar Down in Tokyo

February 28, 1991

TOKYO (AP) _ Tokyo share prices surged in heavy trading today in a favorable reaction to the end of fighting in the Persian Gulf, while the dollar weakened against the Japanese yen.

The Nikkei Stock Average of 225 selected issues gained 314.97 points, or 1.2 percent, closing at 26,409.22. On Wednesday, the index shed 188.71 points.

Volume on the first section totaled 1 billion shares, up from Wednesday’s 500 million shares.

The morning stock session closed moments before President Bush announced that the allied armies were ending attacks on Iraqi forces.

But Satoru Ishihara, an analyst with Yamaichi Securities, said share prices rallied almost across the board in anticipation that Bush would announce an end to the war.

At the end of the morning session, the market’s main barometer was up 422.83 points, or 1.62 percent.

Masayoshi Yano, a stocks trader at Nikko Securities Co., said the index’s climb was stopped by profit-taking on recent advances based on anticipation of an early end to the war.

Gainers included issues related to postwar reconstruction demand such as steel, construction and shipbuilding shares, said Kazuyuki Suzuki, an analyst with Daiwa Securities.

The dollar closed at 131.95 yen, down 0.85 yen from Wednesday’s close of 132.80 yen. It also was lower than its overnight finish of 132.25 yen in New York. After opening at 132.05 yen, it stayed in a narrow range between 131.85 yen and 132.23 yen.

Thursday’s spot trading totaled $8.68 billion, up from $7.33 billion Wednesday.

″It’s a somewhat quiet market,″ said Takayuki Togawa, a dealer with Tokai Bank. He said the dollar’s slide was due to position adjustments by traders who had bought in recent days.

The dollar had gained a total of 2.22 yen on Monday and Tuesday before losing 0.27 yen Wednesday.

″The dollar will be bought eventually. Since the United States’ leadership ended the Gulf War, confidence in the United States will recover,″ Togawa said.

Other dealers said the currency market reacted little to Bush’s announcement because investors had been expecting an early end to the war.

The benchmark North Sea Brent crude oil for April delivery was being traded at $18.20-$18.30 a barrel at mid-afternoon, about the same as overnight closing levels in New York.

In bond dealings, the price of the benchmark No. 129 10-year Japanese government bonds fell to 99.60 points as of 5 p.m. from the previous day’s 99.97-point finish. Their yield rose to 6.470 percent from 6.415 percent.

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