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Tokyo Stocks Edge Up

July 23, 1998

TOKYO (AP) _ The dollar inched higher against the yen in late morning trading Thursday amid concern about the outcome of a race to choose Japan’s next prime minister. Stocks bounced back slightly.

The dollar bought 140.73 yen, up 0.07 yen from late Wednesday in Tokyo but below its late New York rate of 141.24 yen.

The yen came under pressure in New York on indications that Foreign Minister Keizo Obuchi was likely to succeed resigning Prime Minister Ryutaro Hashimoto.

Obuchi is seen as less aggressive on economic reforms than other candidates in a ruling party race which will conclude in a vote on Friday. Last week, Hashimoto announced his resignation to take responsibility for his party’s setback in the July 12 elections for the upper house of Parliament.

The dollar was also buoyed by U.S. Federal Reserve Chairman Alan Greenspan’s remarks in congressional testimony Wednesday that the U.S. economy can withstand the effects of the Asian financial crisis.

In Tokyo trading early Thursday, however, the dollar’s rise was stemmed by profit-taking.

Share prices opened lower on declines in the yen and an overnight fall on Wall Street. But the market turned mixed by midday in quiet trading. Many investors held back to await the outcome of the LDP election. The party head will become Japan’s prime minister because the ruling party has a comfortable majority in the more powerful lower house.

The Nikkei Stock Average gained 3.39 points, or 0.02 percent, to 16,296.45 at the end of the morning session. On Wednesday, the average had lost 263.63 points, or 1.6 percent.

The broader Tokyo Stock Price Index of all issues listed on the first section fell 1.14 points, or 0.09 percent, to 1,256.71. The TOPIX closed down 19.32 points, or 1.15 percent, the previous day.

The yield on the benchmark 10-year Japanese government bond fell to 1.350 percent from Wednesday’s finish of 1.385 percent, driving its price up to 110.75 from 110.50.

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