Dollar Edges Higher, Stocks Rebound
TOKYO (AP) _ The U.S. dollar edged higher today against the Japanese yen, a day after sinking to its latest record low. Tokyo share prices rebounded in thin trading.
In late Tokyo trading, the dollar was trading at 86.33 yen, up 0.03 yen from late Tuesday and above its level of 86.21 yen Tuesday in New York.
The dollar had slumped on Tuesday as low as 85.75 yen, its its lowest level in Tokyo since modern exchange rates were established in the late 1940s. It had hit a worldwide low of 85.60 yen in Australia early Tuesday, representing a drop of about 14 percent since mid-February.
Dealers said traders now expect Japan’s central bank to intervene by buying dollars if the U.S. currency falls below 86 yen.
Meanwhile, traders were awaiting the release Friday of U.S. employment figures for March, said Toshiyuki Tomita, a dealer with Chemical Bank in Tokyo.
Other dealers said traders also found few fresh incentives to buy or sell Wednesday.
``But the larger undercurrent that’s pushing up the yen has not changed,″ Tomita said.
Takeshi Nagano, president of the Japan Federation of Employers’ Associations, urged the Bank of Japan to cut its key lending rate to help industries hurt by the yen’s rapid rise.
Nagano said the central bank had missed the right moment to cut its official discount rate, but if it cut the rate now ``it would not be bad.″
Lower interest rates tend to make a nation’s currency less attractive to investors, while easing the financial burdens of companies.
The Bank of Japan has been under fire from some government and business leaders for failing to take action Friday, when the bank said it would be appropriate to guide short-term market interest rates lower while leaving the discount rate unchanged.
The discount rate, charged by the central bank for loans to commercial banks, now stands at 1.75 percent, the lowest among major industrialized nations.
Japan’s trade and finance ministers both vowed Tuesday to fight the surging yen, seen as a threat to Japan’s precarious economic recovery.
On the Tokyo Stock Exchange, the Nikkei Stock Average of 225 selected issues rose 251.96 points, or 1.61 percent, closing at 15,882.49. It had climbed 249.24 points, or 1.62 percent, on Tuesday.
Share prices started slightly higher, fell back moderately at midday and advanced in the afternoon as investors welcomed the stability of the foreign exchange market. Rising futures prices also supported the confidence of individual and institutional investors.
The Tokyo Stock Price Index of all issues listed on the first section was up 8.67 points, or 0.68 percent, to 1,279.15. It had ended up 19.87 points, or 1.59 percent, on Tuesday.
An estimated 210 million shares changed hands on the first section, down from Tuesday’s 287 million. Advances outnumbered declines 676 to 347, with 150 issues unchanged.
The price of the benchmark No. 174 10-year Japanese government bonds closed at 107.63 yen, down 0.77 yen from Tuesday’s close. The yield rose to 3.520 percent from 3.420 percent.