Stocks Plunge, Dollar Higher
TOKYO (AP) _ Prices on the Tokyo Stock Exchange fell today as political uncertainties continued. The dollar ended higher.
The 225-issue Nikkei Stock Average lost 277.88 points, or 1.27 percent, ending the day at 21,541.64. On Monday, the average shed 287.60 points, or 1.30 percent.
Japan’s financial markets were closed Tuesday for Foundation Day, a national holiday.
The Tokyo Stock Price Index of all issues listed on the first section today closed at 1,594.81, down 18.13 points, or 1.12 percent. TOPIX lost 14.48 points Monday.
Continuing concerns about Japanese political scandals, pessimistic forecasts in corporate earnings for fiscal 1991, which will end Mar. 31, and the dollar’s sharp advance overseas contributed to today’s stock market drop. Arbitrage selling accelerated the fall.
Trading was thin, with first section volume estimated at 170 million shares, up from Monday’s 120 million. Declining issues outnumbered gainers 823 to 139, with 129 unchanged.
An embarrassing loss by the governing Liberal Democratic Party in a by- election Sunday and far-reaching financial scandals believed to involve many powerful politicians have dampened market sentiment.
″There is little positive news in the market to encourage buying,″ said Masashi Wakabayashi, an analyst with Yamaichi Securities Co.
On the foreign exchange market, the dollar closed at 127.01 yen, up 1.66 yen from Monday’s close. It opened at 127.05 yen and ranged between 126.78 yen and 127.10 yen.
Comments by Federal Reserve Chairman Alan Greenspan at a Tuesday meeting in Texas that U.S. interest rates are low enough to stimulate the economy contributed to the dollar’s strength, dealers said.
″Basic dollar sentiment is getting stronger but investors are reluctant to push it up too fast because of concerns about central bank intervention,″ said Mahito Noguchi, a Chemical Bank dealer.
Noguchi said recent political scandals were contributing to the yen’s weakness. ″Investors are very sensitive to political scandals, which is building up a basis for the yen’s chronic weakness now,″ he said.
The benchmark No. 129 10-year Japanese government bonds closed lower at 105.02 points from Monday’s 105.35-point finish. Their yield rose to 5.500 percent from 5.445 percent.