Dollar Rebounds Slightly, Share Prices Gain
TOKYO (AP) _ The dollar edged higher against the Japanese yen today as a threat of central bank intervention discouraged dollar selling. Tokyo share prices gained in light trading.
The dollar closed at 97.63 yen, up 0.02 yen from Wednesday’s Tokyo finish and above its overnight New York close of 97.28 yen.
After opening at 97.43 yen, it ranged between 97.40 yen and 97.65 yen. Spot trading totaled $6.02 billion, down from Wednesday’s $7.08 billion.
″People here remain hesitant to move with the threat of Japan’s central bank intervention,″ said Shigefumi Nakamura, a dealer with Sanwa Bank.
The gains in Tokyo followed the dollar’s plunge to near record lows during Wednesday’s trading in New York.
Traders said the Bank of Japan reportedly bought dollars to slow the U.S. currency’s slide soon after the Tokyo opening. The Bank of Japan does not comment on its intervention activities.
Prime Minister Tomiichi Murayama told reporters he believed the yen’s recent gains against the dollar ″would be temporary.″
The dollar came under pressure in New York Wednesday after the U.S. Commerce Department said the trade deficit with Japan rose to $5.8 billion in August, when imports hit a record monthly high.
U.S. officials in the past have favored a stronger yen as a way to reduce Japan’s huge trade surplus by making its exports more expensive and less competitive abroad. Japanese officials fear a strong yen could hamper this country’s recovery from a 3-year-old slump.
Meanwhile, the 225-issue Nikkei Stock Average rose 123.03 points, or 0.62 percent, closing at 19,991.90. On Wednesday, the average had fallen 123.53 points, or 0.62 percent, closing at 19,868.87.
The Tokyo Stock Price Index of all issues listed on the first section was up 8.24 points, or 0.52 percent, to 1,588.71. It had slipped 6.18 points, or 0.38 percent, to 1,580.47 the previous day.
An estimated 270 million shares changed hands on the first section, up from Wednesday’s 230 million. Advances outnumbered declines 568 to 417, with 186 issues unchanged.
Arbitrage buying, joined by some public funds, helped prices rebound in narrow range trading, dealers said.
In arbitrage trading, investors seek profits from the price gaps between the spot and futures markets.
The benchmark No. 164 10-year Japanese government bonds closed at 96.03 yen, down 0.23 yen from Wednesday’s finish. Their yield rose to 4.720 percent from 4.695 percent.