TOKYO (AP) _ The dollar fell against the yen Wednesday on renewed concerns about the nation's trade tension with the United States, while prices on the Tokyo Stock Exchange rose moderately on active buying by foreigners.

The dollar closed at 105.83 yen, down 0.55 yen from Tuesday's Tokyo close and below its overnight New York finish at 106.05 yen. The currency opened at 106.08 yen and ranged between 105.76 yen and 106.08 yen.

Dealers said the dollar fell as players sold it on remarks by U.S. Trade Representative Mickey Kantor that he remained ''deeply concerned'' about Japan's trade imbalance.

Kantor's remarks renewed Japanese players' concerns over U.S.-Japan trade relations, they said.

Afternoon rumors of dollar-buying intervention by the central bank had little impact on the currency rates.

The Bank of Japan reportedly bought dollars at around 105.90 yen in the afternoon to save the dollar from falling below 105.80 yen, a key psychological border. The central bank does not comment on its monetary actions.

The dollar opened lower here following its overnight slip in New York.

Ryoko Kawashima, a Citibank dealer, said many speculators were hoping for news of a lower dollar as the German central bank prepares to set its repurchase rate later Wednesday.

On The Tokyo Stock Exchange, the 225-issue Nikkei Stock Average rose 168.92 points, or 0.82 percent, to close at 20,677.77. On Tuesday, the Nikkei slipped 17.30 points, or 0.08 percent, closing at 20,508.85 points.

The Tokyo Stock Price Index of all issues listed on the first section was up 10.33 points, or 0.63 percent, to 1,653.27. The TOPIX had gained 3.07 points, or 0.19 percent, to 1,642.94 the day before.

Traders said stocks rallied on index-linked arbitrage buying as players took profit from the price gaps between spot and futures markets. Index futures opened sharply higher following a 500-point gain for the Nikkei 225 June contract overnight in Chicago.

Despite some profit-taking at mid-morning, prices rose on strong buying by overseas investors, dealers said.

Paul Migliorato, a trader at Jardine Fleming Securities, said foreign investors were heavily buying Japanese stocks because their prices are now seen as undervalued.

The Nikkei, which ended the 1989 trading at its record high of 38,915.87 points, has continued to stumble since then.

At 3 p.m. (1:00 a.m. EST), the benchmark No. 157 10-year Japanese government bonds stood at 102.95 yen, 0.07 from Tuesday's finish. Their yield slipped 0.010 percentage points to 4.060 percent.