Dollar Rises, Stocks Fall On Tokyo Exchange
TOKYO (AP) _ The U.S. dollar resumed its strong gains against the Japanese yen today, while share prices plunged on the Tokyo Stock Exchange as the dollar’s rise discouraged investors, dealers said.
The Nikkei Stock Average of 225 selected issues, a 13.80-point gainer Tuesday, lost 220.62 points, or 0.70 percent, closing at 31,360.68.
The index started downward in early trading after the dollar’s higher opening in Tokyo, said Kiyoshi Iwasaki of Nomura Securities, Japan’s largest brokerage.
″Since the majority of investors have been concerned over the index’s rapid rise recently, they began concertedly selling as prices went down,″ he added.
A major influence on the Nikkei, he said, was a decline in financial issues.
Today’s trading, dominated by sell orders, was active, with volume on the first section estimated at 1 billion shares.
On the foreign exchange market, the dollar closed at 130.40, up 1.27 yen from Tuesday’s close of 129.13 yen. The dollar opened at 130.58 and ranged between 130.20 yen and 130.67 yen.
The dollar had gained a total of 2.21 yen last Friday and Monday, but fell 0.60 yen on Tuesday before climbing again.
Today’s early Tokyo trading was dominated by dollar-buying, but then speculative investors started selling to take profits, said a dealer with the Bank of Tokyo, speaking on condition of anonymity.
The dollar’s strong opening in Tokyo followed a surge in New York prompted by comments by U.S. Federal Reserve Board Chairman Alan Greenspan that current exchange rates were tolerable, dealers said.
Testifying before a joint economic committee of Congress, Greenspan said U.S. industry is competitive enough at the present dollar rate. He added that the current rate of inflation was too high and that he expected a substantial cut in the U.S. trade deficit.