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Tokyo Stocks Fall in Early Trading

October 26, 1998

TOKYO (AP) _ Tokyo stocks fell in sparse trading Monday as investors took profits following last week’s gains. The U.S. dollar was lower against the yen.

The benchmark 225-issue Nikkei Stock Average tumbled 243.49 points, or 1.72 percent, to 13,901.21 at the end of the morning session. On Friday, the average fell 150.86 points, or 1.06 percent.

In currency trading, the dollar bought 118.57 yen at mid-morning, down 0.57 yen from late Friday in Tokyo but above its New York level of 117.95 yen late Friday.

Before Friday’s decline, the Nikkei had gained some 1,300 points, or 10 percent, in the preceding five trading days.

``After the Tokyo market gained strongly last week, it is seeing active profit-taking,″ said Kunihiro Hatae, general manager at Tokyo Securities Co.

Traders also said foreign investors were selling to make up for Wall Street’s losses on Friday, when the benchmark Dow Jones Industrial Average lost 80 points.

The selling weighed on the broader Tokyo Stock Price Index of all issues listed on the first section, driving it down 18.45 points, or 1.73 percent, to 1049.70. The TOPIX dropped 6.14 points, or 0.57 percent, on Friday.

The dollar’s relative strength from Friday’s New York levels came amid renewed concern about the health of Japan’s financial system after credit ratings agency Moody’s Investors Service placed four Japanese banks under review last week for possible ratings downgrades.

But such concerns were offset by signs the Japanese government may finally be moving to tackle the banking industry’s bad loan problem, traders said.

In the first nationalization of a Japanese bank since World War II, the government took control of the troubled Long-Term Credit Bank of Japan Ltd. using new bank rescue legislation passed into law earlier this month.

Public money will be used to write off the bank’s billions of dollars in defaulted loans and a buyer will be sought for the healthy operations.

The yield on the benchmark No. 203 10-year Japanese government bond slipped to 0.850 percent from Friday’s finish of 0.860 percent, driving its price up to 108.46 yen from 108.37.

(km-mef-dj)

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