Dollar Tumbles, Japanese Stocks Rebound
TOKYO (AP) _ The dollar fell sharply to a 13-month low against the Japanese yen today, while share prices on the Tokyo Stock Exchange rebounded.
The dollar closed at 138.30 yen, down 1.55 yen from Tuesday’s close. After opening at 139.30 yen, the currency ranged between 138.25 yen and 139.35 yen.
It was the dollar’s lowest closing since Aug. 4, 1989, when it finished trading at 138.05 yen.
Dealers said dollar-selling pressure was strengthening, with speculation in the market that U.S. monetary authorities may ease their monetary policy to counter an economic slowdown in the United States.
Lower U.S. interest rates tend to make the dollar less attractive to foreign investors.
Traders noted little noticeable market reaction to President Bush’s speech Tuesday night in which he urged Congress to finish work on a budget agreement ″to get America’s fiscal house in order″ before the nation’s new fiscal year begins on Oct. 1.
On the stock market, the Nikkei Stock Average of 225 selected issues gained 611.48 points, or 2.49 percent, closing at 25,216.14. The index lost 476.24 points on Tuesday.
A total of 530 million shares were traded on the first section, up from Tuesday’s 400 million shares.
″Shares on the spot market were broadly bought along with futures, including index-linked buying,″ helping to push the Nikkei index higher, said Takashi Morinaga, an equity analyst with Okasan Securities Co.
Morinaga said the stock market was favorably influenced by the yen’s appreciation against the dollar and rebounding bond prices.
Benchmark No. 119 10-year Japanese government bonds closed at 82.45, up from 82.03 on Tuesday. Their yield dropped to 8.260 percent from 8.360 percent on Tuesday.