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Dollar Plunges, Stocks Higher

July 4, 1990

TOKYO (AP) _ The dollar plunged against the yen and other major currencies in Tokyo today, while the Tokyo Stock Exchange’s key index inched up and Japanese bonds rallied strongly.

The dollar closed at 150.30 yen, down 1.38 yen from Tuesday’s 151.68-yen finish. It opened at 150.25 yen and ranged between 149.90 yen and 150.65 yen.

The U.S. currency had edged up 0.28 yen on Tuesday, but its fall since last Thursday now totals 4.12 yen.

Dealers said the dollar’s low opening in Tokyo Wednesday followed its decline in overseas markets.

″In addition to the yen, the dollar was lower against almost all the other major currencies,″ said Minori Takeuchi, a dealer with Chemical Bank in Tokyo.

There was no specific economic factor behind the selling, she added.

″Today’s dollar-selling was technical adjustments, trying to push it below the 150-yen level,″ she said.

Other dealers said expectations of lower U.S. interest rates caused the dollar’s weakness. Lower interest rates tend to make a country’s currency less attractive to overseas investors.

About $16.06 billion changed hands in spot trading.

On the stock exchange, the 225-share Nikkei Stock Average rose 31.32 points, or 0.10 percent, closing at 32,445.92. The index rose 254.37 points on Tuesday.

The Nikkei was up 100.66 points at the end of the morning session but gradually fell in the afternoon, when market players sold high-tech issues due to the yen’s appreciation, traders said.

Construction, real estate and steel issues did well, but trading was inactive because institutional investors remained on the sidelines, said Masashi Yamane, a trader with Nippon Kangyo Kakumaru Securities Co.

Estimated first section volume was 550 million shares, down from Tuesday’s 450 million.

In bond dealings, the price of the benchmark No. 119 10-year Japanese government bond rose to 87.11 points from 86.64 on Tuesday, pushing the yield down to 7.165 percent from 7.265 percent.

Update hourly