Dollar Slips Further, Stocks Rise
TOKYO (AP) _ The dollar fell against the Japanese yen for the fourth consecutive trading day today, while share prices on the Tokyo Stock Exchange advanced.
Both the yen and stocks gained from buyers’ optimism about the re-election of conservative candidates in Sunday’s Tokyo city assembly elections, traders said.
The dollar closed at 106.00 yen, down 0.35 yen from Friday’s close in Tokyo and also below its Friday finish of 106.15 yen in New York. It opened at 105.45 yen and ranged between 105.00 yen and 106.30 yen.
The dollar now has fallen 5.25 yen in four trading days, after a 6.22-yen gain in the previous five days from record lows. The gains came amid political uncertainty as Parliament gave Prime Minister Kiichi Miyazawa’s government a vote of no-confidence.
The U.S. currency, considered a safe investment in times of trouble, also had been expected to advance after a U.S. missile attack on Iraqi intelligence facilities Saturday night.
But Japanese investors ignored the news and focused on Sunday’s domestic election, in which a leftist opposition party was the big loser, dealers said.
They said the Bank of Japan also intervened by buying dollars at about 105 yen to stop the U.S. currency’s slide. The central bank does not comment on its money market actions.
In addition, market players also wanted to slow the yen’s rise, said Akira Narumi, a Sakura Bank dealer.
″Very few people here now want the yen to rise any higher than 105 yen,″ he said.
Japanese officials have warned that the higher yen, which makes Japanese products more expensive overseas, hurts exporters and could hamper the nation’s economic recovery.
The yen has been rising on perceptions that the U.S. government is pushing for a stronger yen to help cut Japan’s massive trade surplus.
Today’s spot trading totaled $10.196 billion, down from $10.583 billion Friday.
On the stock exchange, the 225-issue Nikkei Stock Average gained 227.19 points, or 1.16 percent, closing at 19,886.76. On Friday, it had closed at 19,659.57 points, down 25.50 points, or 0.13 percent.
The Tokyo Stock Price Index of all issues listed on the first section was up 16.42 points, or 1.04 percent, to 1,600.47. It had fallen 0.03 points on Friday, when it closed at 1,584.05.
Volume on the first section was thin at an estimated 240 million shares, down from Friday’s 260 million. Advances outnumbered declines 754 to 260, while 149 issues were unchanged.
Interest-rate sensitive shares, including banks, rallied because the yen’s continuing strength fueled speculation that the Bank of Japan may cut its key lending rate, traders said.
The price of the benchmark No. 145 10-year Japanese government bond closed at 107.01 yen, up 0.17 yen from Friday’s close. Its yield fell by 0.025 percentage point to 4.385 percent.