Japan Stocks Surge at Week's End
Mar. 05, 1999
TOKYO (AP) _ Japanese stocks staged a 5-percent surge today in their largest one-day rally of the year, bolstered by an overnight Wall Street rally and record low interest rates in Japan. The dollar's gains against the yen also encouraged investors.
The dollar bought 122.94 yen in late afternoon trading, up 0.36 yen from late Thursday in Tokyo but below its late New York level of 123.35 yen overnight.
The benchmark 225-issue Nikkei Stock Average climbed 710.55 points, closing the week at 14,894.00 points _ the highest closing level since Dec. 9, when the index finished at 14,931.90.
Today's point gain in the Nikkei was the largest for a single-day session since Oct. 7, when the average surged more than 800 points. On Thursday, the average gained 13.09 points, or 0.09 percent.
The dollar moved as high as 123.58 yen earlier in the session, but met profit-taking by Hong Kong and U.S. players ahead of the release of main U.S. payroll data later today, traders said.
Dollar sentiment remains fairly bullish amid notions that the Bank of Japan may be looking to ease monetary policy further to help pull the country out of its worst recession in decades.
That sentiment was bolstered by comments today from a senior International Monetary Fund official who said he would welcome any further easing of Japan's monetary policy to stimulate the economy.
Lower interest rates tend to make a nation's currency less attractive to investors, but spur stock investments by lowering borrowing costs.
Earlier this week, the Bank of Japan began guiding domestic short-term interest rates closer to zero, and the move was praised today by top Japanese officials.
Finance Minister Kiichi Miyazawa said today a fall in long-term interest rates as a result of lower overnight call rates is not a minus.
The Bank of Japan said today the nation's overall wholesale price index for February was up 0.2 percent from January but was 3.8 percent lower than the year-earlier month. The data fell within analysts' forecasts.
Though the data were considered neutral, currency investors were using it to buy dollars in the morning, traders said.
The dollar ranged between 122.43 yen and 123.58 yen in today's trading.
In other currencies, the euro was traded at 132.98 yen, down from 133.13 yen late Thursday in Tokyo.
On the stock market, traders said investors from overseas bought futures to increase their weight in Japanese shares. They said that many investors from abroad are beginning to feel that Japan's economy may have bottomed out and could be headed for a slow recovery.
``The investment environment was ideal today,'' said Kazunori Jinnai, deputy general manager of the equity department at Daiwa Securities.
Trading was heavy, with an estimated 669 million shares traded on the exchange's first section and the biggest turnover of the year. On Thursday, 389 million shares changed hands. Advancers overwhelmed decliners by 1,146 to 89, with 71 issues unchanged.
Tokyo stocks started higher today after the Dow Jones industrial average in New York climbed 191.52 points to 9,467.70 at Thursday's close, boosted by benign economic data, strong retail sales reports and higher oil prices.
Expectations that public funds were buying today also attracted investors to shares, traders said.
Gainers in Tokyo included Sony and Toshiba, which were heavily bought following Thursday's announcement the two companies will join hands to produce a new advanced chip for the next generation of the popular PlayStation video game player.
The broader Tokyo Stock Price Index of all issues listed on the first section was up 41.61 points, or 3.76 percent, to 1,146.72 points. The TOPIX rose 5.30 points, or 0.48 percent, the previous day.
The yield on the benchmark No. 203 10-year Japanese government bond fell to 1.560 percent from Thursday's finish of 1.610 percent, driving its price up to 101.94 yen from 101.53 yen.