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Dollar Up, Shares Down

March 5, 1990

TOKYO (AP) _ The dollar rose against the Japanese yen Monday morning, while share prices on the Tokyo Stock Exchange fell moderately.

The dollar closed at 149.95 yen, up 0.20 yen from Friday’s close of 149.75 yen. After opening at 150.15 yen, it moved in a range of 149.90-150.30 yen.

On the stock market, the Nikkei Stock Average of 225 selected issues, which gained 227.98 points Friday, fell 212.36 points, or 0.62 percent, to close at 33,845.20.

The benchmark No. 119 Japanese government bond fell slightly in the early session, with its yield moving to 7.175 percent in late morning, up from Friday’s close at 7.165 percent.

Currency dealers said the dollar’s strength followed its closing above 150 yen in New York Friday, its highest finish in nearly nine months.

″The dollar’s strength remains unchanged,″ said Norio Takeda, a dealer with the Bank of Tokyo. ″But it doesn’t seem like it will rise sharply at this time.″

Dealers said the Bank of Japan, the nation’s central bank, has been intervening intermittently by selling dollars to stem the yen’s fall.

The amount of intervention was not immediately known, because the bank customarily does not comment on its monetary policy.

Dealers said market players were anxiously watching whether there would be joint market intervention with other countries’ central banks, including the U.S. Federal Reserve Board.

President Bush and Prime Minister Toshiki Kaifu reportedly discussed the matter during the Japan-U.S. summit meeting, held Friday and Saturday in Palm Springs, Calif.

″The general perception of the market was that no significant agreement was reached at the meeting, but the market is somewhat nervous about whether the two leaders agreed to intervene jointly or not,″ said a dealer at Daiichi Kangyo Bank.

The summit was convened on only one week’s notice following Bush’s urgent request for quick progress in stalled U.S.-Japan trade talks. But market dealers said they were not surprised at the results of the meeting, in which no specific issue was discussed but both sides agreed to work harder to reach agreement.

Many market players were also watching the Bank of Japan to see whether it will raise its official discount rate before Governor Yasushi Mineno leaves on a trip to Europe, where he will attend a meeting of the Bank for International Settlements countries in Switzerland, the Bank of Tokyo’s Takeda said.

Analysts have speculated for weeks that an interest-rate hike will take place, and this has been blamed in part for the sharp decline of Tokyo share prices.

Securities dealers said the yen’s weakness and bearish bond prices sent the Nikkei index falling despite some active buying by private investors.

″There were some private investors actively buying shares because they thought share prices had fallen enough, but institutional investors remain sidelined because of uncertainties in the currency and bond market,″ said a dealer at Nikko Securities Co., speaking on condition of anonymity.

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