Dollar Drops, Stock Prices Lower
TOKYO (AP) _ The dollar fell sharply against the Japanese yen Monday while share prices on the Tokyo Stock Exchange continued to decline.
The dollar closed at 148.60, down 2.15 yen from Friday’s close of 150.75 yen. After opening at 149.10 yen, the currency moved in a range of 148.55-149.20 yen.
The 225-issue Nikkei Stock Average fell 420.53 points, or 1.36 percent, to close at 30,442.95.
Toru Kanai, a foreign exchange analyst with New Japan Securities Co., said the dollar opened lower following declines abroad linked to a U.S. announcement Friday that U.S. gross national product was not increasing as fast as expected.
Kouhei Kuroda, a dealer with Fuji Bank, added that the Tokyo market was also reacting to a fall in the Sydney market in which the U.S. currency declined as far as the 148.45-yen level.
But the dollar was bought up again by dealers wishing to cover their short, or oversold positions, Kuroda said. And afterwards, the dollar hovered around 149 yen, with sale orders nearly matching buy orders.
″The weakness of the Nikkei average and the increase in oil prices are making it difficult to continue buying the yen,″ Kuroda said.
On the stock exchange, the index fell on arbitrage sales of spot issues in exchange for purchases of index futures, said Kozo Hasunuma of Yamaichi Securities Co.
The decline was also accelerated by a thin trading volume and buying which concentrated on specific issues, he said.
The price of the benchmark No. 119 10-year Japanese government bond dropped to 85.19 points as of 11:15 a.m. from its close Friday at 85.23 points. Its yield was posted at 7.595 percent, down from 7.585 percent.