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Japanese Stocks Retreat Early On

January 8, 1999

TOKYO (AP) _ Japanese stock prices fell in early trading Friday on concern about the outlook for profit growth at exporters amid continued volatility in global currency markets. The dollar rose against the yen.

The Nikkei Stock Average slid 175.39 points, or 1.30 percent, to 13,361.17 in the first 30 minutes of trading. On Thursday, the average closed up 68.10 points, or 0.51 percent.

The dollar bought 111.34 yen, up 0.36 yen from late Thursday in Tokyo and also above its level of 111.04 yen in New York.

On the Tokyo Stock Exchange, shares lost ground on worries about a stronger yen after the dollar hit a 27-month low against the Japanese currency, buying 109.88 yen.

A stronger yen erodes the value of profits made overseas by Japan’s many exporters. Stocks of major auto and electronics manufacturers were among the biggest losers, including shares of Sony Corp. and Toyota Motor Corp.

The broader Tokyo Stock Price Index of all issues listed on the first section dropped 12.18 points, or 1.14 percent, to 1,057.42. The TOPIX closed up 10.84 points, or 1.02 percent, on Thursday.

On Wall Street, the Dow Jones industrial average dropped 7.21 points to close Thursday’s session at 9,537.76. The blue-chip index had fallen nearly 120 points in early afternoon but rallied back, partially on a rise in bank shares.

On Wednesday, the Dow jumped 233.78 points to a record-high 9,544.97.

In currency dealings, the dollar was buoyed by short-covering ahead of daily exchange rate price-fixing operations, traders in Tokyo said.

But the U.S. currency’s gains were likely to be curtailed by lingering concern over financial turmoil in Brazil and U.S. President Clinton’s impeachment trial in the Senate, they said.

Meanwhile, the euro was traded at $1.1707, up from $1.1642 in Tokyo late Thursday and also higher than its level of $1.1670 in New York.

The yield on the 10-year Japanese government bond fell to 1.700 percent from Thursday’s finish of 1.710 percent, driving its price up to 100.81 yen from 100.73 yen.

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