Stocks Rebound, Dollar Moves Higher
TOKYO (AP) _ Prices on the Tokyo Stock Exchange rebounded Thursday as uneasiness over the collapse of a British merchant bank subsided, traders said. The dollar moved higher against the yen.
The 225-issue Nikkei average rose 344.47 points, or 2.07 percent, closing at 16,963.18. On Wednesday, the key index was down 434.72 points, or 2.55 percent, closing at 16,618.71.
The rebound came as investors, especially foreign investors, were reassured as liquidation of large positions held by Baring Securities (Japan) Ltd. on the Nikkei 225 futures was smoothly under way, traders said.
``The Baring case as a negative factor is almost over here,″ said Hideo Omura, a senior trader with Dai-Ichi Securities.
The Tokyo market was also encouraged by an overnight advance in Nikkei-225 futures prices on the Chicago Mercantile Exchange, Omura said.
In jittery trading this week, following the collapse of one of Britain’s oldest merchant banks, the Nikkei average lost 664.24 points Monday, then recouped 244.73 points on Tuesday, then shed 434.72 points Wednesday.
The crisis was triggered by an announcement Sunday by the Bank of England that Baring Brothers and Co. had been hit with losses of about dlrs 1 billion from large-scale unauthorized trading in Southeast Asia.
Investors took comfort from a report that Daiwa Securities, acting in place of Barings, managed to close half of the contracts Wednesday.
The Tokyo Stock Price Index of all issues listed on the first section was up 26.18 points, or 1.97 percent, to 1,354.18. The TOPIX lost 20.79 points, or 1.54 percent, to 1,327.60 the day before.
An estimated 310 million shares changed hands on the first section, down from Wednesday’s 321 million shares. Advancing issues outnumbered declines 929 to 147, with 99 unchanged.
At 3 p.m. (1:00 a.m. EST), the dollar was trading at 96.66 yen, up 0.12 yen from the same time Wednesday, but below its level of 96.78 yen in late New York trading overnight.
The dollar was moving in a narrow range in Tokyo after its mixed trading in New York overnight, traders said.
Traders said Japan’s central bank was not sighted on the exchange market during morning trading. On Wednesday, the Bank of Japan bought $200-300 million to stem the dollar’s fall. The dollar fell to a record low of 96.30 yen at one time on Wednesday, the lowest level in Tokyo since the modern exchange rate system was set up in the late 1940s.
The price of the benchmark No. 174 10-year Japanese government bonds was 101.89 yen, unchanged from Wednesday’s close. Their yield remained unchanged at 4.320 percent.