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Tokyo Stock Prices Rise Sharply

March 31, 1998

TOKYO (AP) _ Tokyo stock prices rose sharply Tuesday after Japan’s tax panel chief proposed large scale tax cuts. The dollar was higher against the yen.

The benchmark 225-issue Nikkei Stock Average rose 264.13 points, or 1.62 percent, to 16,527.17 points to close the session. On Monday, the average fell 476.22 points, or 2.84 percent.

Hiroshi Kato, head of Japan’s tax panel, called for a 10 trillion yen ($76 billion) cut in corporate, income and regional taxes. Kato said the government could sell national assets or issue deficit bonds to finance the cut.

Stocks also received a boost in morning trading when the government bought shares in an apparent attempt to prop up the market ahead of the end Tuesday of the fiscal year.

Japan’s posts and telecommunications minister, Shozaburo Jimi, said that his ministry was pumping funds into the stock market but denied it was an attempt to bolster share prices.

The government had repeatedly stated that it hoped to lift the market above 18,000 points before the end of the fiscal year to help banks increase their capital adequacy ratios.

But Japan’s anemic economy and the yen’s weakness against the dollar blocked official attempts to achieve that goal. Investors were taking profits on public fund related rises, traders said.

The broader Tokyo Stock Price Index of all issues listed on the exchange’s first section was up 10.43 points, or 0.84 percent, to 1,251.70 points. The TOPIX closed down 17.28 points, or 1.40 percent, the day before.

In currency trading, the dollar bought 132.41 yen in afternoon trading, up 0.75 yen from late Monday in Tokyo and also above its overnight rate of 132.00 yen in New York.

The yen remains weak because of persistent worries about the health of Japan’s economy. The failure of the Nikkei Average to rise above 18,000 points boosted confidence in the dollar.

Meanwhile, the yield on the benchmark No. 182 10-year Japanese government bond fell to 1.585 percent from Monday’s finish of 1.605 percent, driving its price up to 109.44 yen from 109.30 yen.

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