Stocks drops below 15,000-points level, dollar edged lower
Dec. 26, 1997
TOKYO (AP) _ The Tokyo Stock Exchange's main index dropped below the 15,000-point level today on worries about possible further corporate failures in Japan. The dollar edged lower against the yen.
The 225-issue Nikkei Stock Average lost 497.50 points, or 3.25 percent, closing the week at 14,802.60 points. The main index last closed below the 15,000-point level on Wednesday.
On Thursday, the average rose 375.12 points, or 2.51 percent, with the Nikkei moving above the 15,000-point level on some optimism about a government-funded bailout of troubled banks.
Traders said investors today became worried about the possibility that more Japanese companies could face insolvency over the weekend.
Japan's financial system has been rocked in recent months by a string of financial institution failures, including Japan's then fourth-largest brokerage, Yamaichi Securities Co., which went bankrupt last month.
Recently, traders have often expressed concern at the end of the week because several of the failures, including Yamaichi's, were initially announced on weekends.
``The market is worried about further bankruptcies in the next few weeks,'' said Dhia Amir, senior institutional sales trader at Nomura Securities.
Today sentiment turned bearish particularly after Nitto Kogyo Co., a major Japanese golf course management company, applied for a court-mediated settlement with creditors on Thursday. The Tokyo-based Nitto Kogyo has said its parent company liabilities alone totaled $2.13 billion as of Sept. 30.
Japan's economy remains sluggish in the wake of the collapse of the speculative, asset-inflated ``bubble'' economy of the late 1980s.
Volume on the exchange's first section today was estimated at 380 million shares, down from Thursday's 538 million shares. Decliners overwhelmed advancers 814 to 328, with 144 issues unchanged.
The broader Tokyo Stock Price Index of all issues listed on the first section of the Tokyo Stock Exchange shed 18.64 points, or 1.60 percent, to 1,143.59 points. The index had gained 27.64 points, or 2.44 percent, to close at 1,162.23 the day before.
Meanwhile, the dollar bought 130.24 yen, down a marginal 0.01 yen from late Thursday in Tokyo but above its New York rate late Wednesday of 129.85 yen overnight. It ranged between 130.10 yen and 130.55 yen in today's trading.
Activity remained light on the foreign exchange market since there were fewer traders in the market today as New York and London markets were closed Thursday for the Christmas holiday.
The dollar's movement was limited by speculation that Japan's central bank would intervene to stem a further decline in the yen.
The yield on the benchmark No. 182 10-year Japanese government bond rose to 1.640 percent from Thursday's close of 1.630 percent, driving its price down to 109.30 yen from 109.39 yen.