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Japan Stocks Up in Early Trading

September 28, 1998

TOKYO (AP) _ Japanese stock prices rose sharply in early trading Monday, shrugging off the failure of an affiliate of the troubled Long-Term Credit Bank of Japan. The U.S. dollar rose against the yen.

The benchmark No. 225-issue Nikkei Stock Average gained 240.29 points, or 1.75 percent, to 13,964.29 points in the first 30 minutes of trading. On Friday, the Nikkei shed 481.94 points, or 3.39 percent.

The dollar bought 136.74 yen in early trading, up 2.10 yen from late Friday in Tokyo and also above its late New York rate of 136.25 yen on Friday.

Traders said share prices were sharply higher early Monday, led by an advance on the futures market and buying by public funds.

``Ahead of the September book-closing, public funds may be buying on the futures market,″ said Masaru Arai, general manager of the stock division at Ryoko Securities.

Also supporting the market was news that Japan’s ruling and main opposition parties had reached an agreement on key banking reform measures over the weekend, paving the way for passage of legislation in Parliament by early next month, traders said.

But shares of the Long-Term Credit Bank of Japan dived to an all-time low of 13 yen (9.5 cents) per share, from Friday’s finish of 24 yen (18 cents).

The plunge came after an affiliate of LTCB applied late Sunday for court protection in Japan’s largest ever corporate bankruptcy.

LTCB shares were later traded at 14 yen (10 cents) per share. The bank’s previous record low of 18 yen (13 cents) was recorded on Sept. 18.

Japan Leasing Corp., one of LTCB’s three non-bank affiliates, said Monday it has applied for court protection.

Teikoku Data Bank Ltd., a Tokyo-based credit research firm, said Japan Leasing is estimated to have debts exceeding 2.44 trillion yen ($18.24 billion), making it Japan’s largest corporate bankruptcy.

LTCB, one of Japan’s largest banks, has been unable to shake off speculation it may collapse under the weight of failed real estate loans.

The broader Tokyo Stock Price Index of all issues listed on the first section was up 12.06 yen, or 1.15 percent, to 1,061.99. On Friday, the TOPIX closed down 28.08, or 2.6 percent.

Meanwhile, the yield on the benchmark No. 182 10-year Japanese government bond rose to 0.825 percent from Friday’s finish of 0.815 percent, driving its price down to 108.77 yen from 108.87 yen.

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