Dollar Declines Slightly, Stocks Rebound in Tokyo
Jun. 14, 1989
TOKYO (AP) _ The U.S. dollar, which soared this week to 22-month highs, today declined slightly against the Japanese yen, while share prices rebounded from their downswing of recent sessions.
The Nikkei Stock Average of 225 selected issues, which lost 241.97 points the previous day, rose 189.44 points, or 0.57 percent, closing today's trading at 33,402.99.
The index fell nearly 30 points in the morning session, but rose in the afternoon as investors bought issues related to environmental protection following news that the United States has decided on tougher environmental policies.
The dollar closed at 148.05 yen, down 0.65 yen from Tuesday's close of 148.70 yen. The currency opened at 148.20 and ranged between 147.65 yen and 148.40 yen. It had gained 4.90 yen on Monday and 0.30 yen on Tuesday.
While the market awaited announcement of the Japanese wholesale price index and U.S. trade figures, the dollar edged down following comments by the central bank governor and news that the Finance Ministry had requested restrictions on investment in dollar bonds, said Toru Kanai, a foreign exchange analyst with New Japan Securities Co.
Bank of Japan Governor Satoshi Sumita said the dollar's current strength might lead to higher Japanese prices if it is prolonged, but that the central bank does not anticipate the dollar will maintain its current high levels very long.
He told a regular news conference that the dollar's strength ''is clearly overdone'' and that Japan would continue cooperation with other Group of Seven industrialized nations to check the U.S. currency's rise.
He said large-scale intervention Tuesday by the U.S. Federal Reserve indicated it also saw the dollar as too strong.
Kanai said, ''The Bank of Japan reportedly intervened in the market today, but it didn't affect today's trading at all.'' The central bank does not comment on its monetary activities.
Japanese investors' demand for the dollar is still strong, Kanai said, and the ''majority of market players seem to be trying to raise the dollar to the 150-yen mark, or even higher.''
On the Tokyo Stock Exchange, Nomura Securities analyst Masahiro Umemori said trading was thin because many investors were cautiously awaiting major economic indicators, but the market's recent downtrend has halted.
The Japanese wholesale price index for May was to be Friday, and U.S. trade figures for April were to announced Thursday.
Trading was thin, with first section volume estimated at 450 million shares, down from Tuesday's 500 million.