Stocks Down, Dollar Up in Tokyo
TOKYO (AP) _ Share prices fell slightly today on the Tokyo Stock Exchange, while year- end demand for dollars pushed the United States currency up against the Japanese yen.
The 225-issue Nikkei Stock Average shed 293.47 points, or 1.19 percent, to close at 24,349.50. Estimated volume on the first section was heavy, with 800 million shares trading hands.
Today’s fall combined a rush of year-end transactions with ″unwinding selling from arbitrage trading″ after the surges of the last seven trading days, said Satoshi Hirasawa, an analyst for Kokusai Securities.
Volume surged in the morning before special quotations were issued by the Tokyo Stock Exchange this morning for futures and options for December delivery, traders said.
Traders also said the market is positioning itself for the traditional December rally.
″Gradually the market is taking on a much better tone. But it could turn at any point (if) a sudden weakness of the yen″ triggers profit-taking on long positions, said Darrel Whitten, an analyst at Prudential Bache Securities.
The Bank of Japan has not yet seen enough of a slowdown in the economy to bring interest rates down considerably, and is still fighting the inflationary effects of high oil prices and the labor shortage, he said.
High interest rates probably will continue to firm the yen against the dollar until the end of the year, and interest rates will continue to lead stock market action, he said.
On currency markets, the dollar settled at 131.87 yen, up 0.57 yen from Thursday’s close. The currency opened at 132.09 yen, and trading ranged between 131.82 yen and 132.15 yen.
Trading by companies that are closing their books or have a special need of dollars, such as oil companies facing high-priced oil supplies, is helping keep the dollar above 130 yen despite falling interest rates and continued weakness in the United States economy, he said.
In bond dealings, the price of benchmark No. 119 10-year Japanese government bonds fell to 87.61 points from Thursday’s close of 87.82. Their yield was 7.145 percent, compared with 7.100 percent Thursday.