Stocks, Dollar Rise
TOKYO (AP) _ Share prices today posted their largest single-day gain this year on the Tokyo Stock Exchange, while the dollar edged up against the Japanese yen.
The 225-issue Nikkei Stock Average, which lost 56.12 points Monday, shot up 793.96 points or 2.52 percent, closing the day at 32,306.36. It was the index’s fourth largest single-day gain since World War II.
″After trading started with a strong buying mood in the morning, the afternoon session followed the same trend and the market just kept rising,″ said Kenji Ishizuka of Daiwa Securities.
He said the market was active in part because today was the eve of implementation of a new capital-gains tax on stock transactions.
A new tax system will require that stock traders pay a 1 percent capital- gains tax as well as a 0.3 percent transaction tax on stock purchases. Previously, only a 0.55 percent transaction tax was imposed.
Trading on the market’s first section was estimated at a heavy 1.2 billion shares. Construction, chemical and steel issues were particularly strong, but share prices rose almost across the board.
Manji Ueda of Nomura Securities said Japan’s Recruit stock-profiteering scandal had held down the Nikkei’s performance, but any further developments in the scandal were not likely to upset the market.
Prosecutors today filed bribery charges against former Vice Labor Minister Takashi Kato in the scandal that has rocked the government of Prime Minister Noboru Takeshita since last summer.
On Monday, prosecutors also brought bribery charges against Hisashi Shinto, former chairman of Nippon Telegraph and Telephone Corp., Japan’s telecommunications giant. They also charged Hiromasa Ezoe, former chairman of Recruit Co., the information conglomerate at the center of the scandal, and his aide, Hiroshi Kobayashi, with having bribed Shinto.
Recruit Co. officials sold bargain-priced unlisted shares in a real estate subsidiary to over 150 government officials, politicians and business executives, who later reaped large profits after the price soared in over-the- counter trading.
In currency dealings, the dollar finished trading at 132.90 yen, up 0.60 yen from Monday’s 132.30-yen closing. The dollar opened higher at 133.00 yen and ranged during the day between 132.82 and 133.25 yen.
The currency remained strong in Tokyo following its overnight rise in New York, dealers said.
News reports said traders in New York sold the yen and bought the dollar following a rumor that the stock scandal might lead to the arrest of former Prime Minister Yasuhiro Nakasone, dealers said.
″But such a rumor, which I’ve heard many times already, cannot be a dollar-buying incentive,″ said Takamasa Yamasaki of Daiwa Bank. ″Even if Nakasone is arrested and Takeshita kicked out, it would change nothing in the structure of the Japanese economy and political system ruled by the Liberal Democratic Party,″ he said.
A comment by Japanese Finance Minister Tatsuo Murayama today that the current yen-dollar exchange rate should ″be looked at with caution″ weakened the strong dollar-buying mood when the rate hit the 132.20-yen level, other dealers said.
Murayama’s remark suggested the possibility of intervention by the Bank of Japan to halt the dollar’s rise against the yen, but Japanese market players expected the central bank would stay away from the market unless the rate hits 135 yen, Yamasaki said.