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Dollar Lower Against Yen, Shares Hit New High

April 19, 1989

TOKYO (AP) _ The U.S. dollar ended lower Wednesday against the Japanese yen, while share prices on the Tokyo Stock Exchange finished at yet another high.

The Nikkei Stock Average of 225 selected issues finished at a record 33,363.83, gaining 42.17 points, or 0.13 percent. The index had gained 13.33 points to a 33,321.66-point close the previous day.

The dollar closed at 131.88 yen, down 0.22 yen from Tuesday’s 132.10-yen finish. The currency started trading lower at 131.38 yen and moved in a range of 131.35 yen to 131.95 yen.

Traders attributed the dollar’s decline in Tokyo to a similar trend overnight on overseas markets following the release of U.S. economic indicators believed to show a slowdown in the nation’s economy. The dollar closed at 131.41 yen in New York overnight.

The U.S. Labor Department reported Tuesday the nation’s consumer price index in March rose 0.5 percent, up from February’s 0.4 percent, while the Commerce Department on the same day said U.S. housing starts in March fell 5.4 percent to a seasonally adjusted annual rate of 1.397 million.

But the U.S. currency gradually moved upward from its opening as speculative investors began buying dollars due to expectations of higher interest rates in the United States, a trader at Bank of Tokyo said on condition of anonymity.

″There is no new reason or economic factor to encourage the dollar-buying in Tokyo, but as long as there is an interest rate gap between the United States and Japan, demand for the dollar remains stronger,″ he said.

On the stock exchange, the Nikkei rose following a 41.61-point overnight gain in the Dow Jones industrial average in New York, the largest increase this year, driven by the U.S. economic indicators.

″The figures were taken positively by participants and encouraged their purchases,″ said Yoshiro Inouye of Nomura Securities in Tokyo.

He said the market’s main barometor was mainly helped by institutional investors’ purchases of steels and chemicals.

″But the index didn’t rise as much as it should due to political uncertainties still lingering in the market,″ he added.

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