Share Prices Bounce Back, Dollar Slips Against Yen
Jul. 09, 1991
TOKYO (AP) _ Tokyo share prices rebounded sharply today after a five-day fall as the government dealt with one key factor in a scandal that has shaken financial markets.
But analysts and traders said it was too early to say the scandal was over.
After roller-coaster movement during the day, the 225-issue Nikkei Stock Average gained 432.79 points, or 1.95 percent, closing at 22,608.96.
The average had fallen a total of 1,932.59 points, or 8.02 percent, in the previous five trading days.
Volume on the market's first section was estimated at 450 million shares, up from Monday's 300 million shares.
Advancing issues outnumbered declines 556 to 366, with 139 unchanged.
''Keen afternoon buying came as investors were reassured that at least one aspect of the scandal, the so-called compensation matter, was settled with the government's penalty measure,'' said Makoto Saito of Nikko Securities.
On Monday, the Finance Ministry ordered the nation's four major brokerages to restrict business for four days beginning Wednesday as a penalty for compensating favored clients for investment losses.
It also ordered a halt to such compensation, which has angered smaller investors who do not receive reimbursement.
Today, Finance Minister Ryutaro Hashimoto said his ministry has yet to grasp full details about two brokerages' links with gangsters. Further sanctions against the firms involved are possible, he said.
''The market's mood brightened with the rise. But it is still difficult to say at this time that the market is clearly set to turn around,'' said Tsutomu Kitamura, chief trader with New Japan Securities.
In the morning, the index fell to 21,731.15 at one point, its first dip below 22,000 points since last Dec. 1, when it closed at 20,221.86. The morning selling was fueled partly by a groundless rumor that the finance minister would resign.
The yen's recovery against the dollar, firming bond prices and a rise in futures prices contributed to the afternoon surge in the index, said a Nomura Securities dealer, speaking on condition of anonymity.
Meanwhile, the dollar closed at 138.60 yen, down 0.15 yen from Monday's close but above its overnight New York close of 138.55 yen.
After opening at 138.77 yen, it ranged between 138.56 yen and 139.03 yen. Spot trading totaled $6.17 billion, up from Monday's $3.76 billion.
Currency dealers said the dollar's high start reflected the Nikkei index's morning slide.
Yasushi Kurozumi, a dealer with Mitsui Taiyo Kobe Bank, said that with the index's afternoon recovery, yen selling halted and profit-taking pushed the dollar back down.
Kurozumi said, however, the dollar seemed at a comfortable level at around 138 yen.
In bond dealings, the price of the benchmark No. 129 10-year Japanese government bonds closed at 97.98 points, up from Monday's 97.89-point finish. Their yield fell to 6.770 percent from 6.785 percent.