Market’s Key Index Extends Six-Year Lows, Dollar Falls
TOKYO (AP) _ Stock prices fell moderately in very thin trading today, extending the market’s six-year lows, while the dollar edged down against the Japanese yen.
The 225-issue Nikkei Stock Average lost 71.46 points, or 0.45 percent, closing at 15,741.27 - its lowest close since May 20, 1986. On Friday, the Nikkei lost nearly 331 points.
An estimated 150 million shares changed hands, down from Friday’s 247 million. Declining issues outnumbered advances 641 to 278, with 171 issues unchanged.
With most investors finding no incentive to trade, stockes fell on arbitrage selling, analysts said. In arbitrage, investors seek profits from price differentials between the spot and futures markets.
″Many medium-size brokerages are giving up to the idea that the government will not become serious enough to take action to buoy up the market until the Nikkei falls below 15,000 points,″ said Tadataka Shikada, an analyst with Tokyo Securities.
Share prices fell despite the governing Liberal Democratic Party’s weekend announcement of plans for large supplementary government spending and other measures to stimulate Japan’s sagging economy.
Katsuya Muraguchi, director of the party’s Policy Research Council, said the party expects the supplementary budget to be decided in September and amount to more than $47.6 billion.
He said that amount is needed to attain Japan’s economic growth target of 3.5 percent for the fiscal year that began April 1.
The dollar closed at 125.50 yen, down 0.10 yen from Friday’s close and also lower than its Friday New York finish of 125.70 yen. It was the dollar’s lowest close since mid-February.
Yutaka Miyajima, an exchange dealer with Mitsui Trust and Banking, said the dollar fell on speculation that the U.S. Federal Reserve Board may ease credit late this week or early next week.
U.S. unemployment figures for June, due to be announced Thursday, will be the key to the Fed move, he said.