Stocks Decline, Dollar Inches Up
TOKYO (AP) _ Share prices fell on the Tokyo Stock Exchange Friday morning and the dollar moved slightly higher against the yen.
Trading was very quiet in Japan’s financial markets ahead of the weekend, especially because many markets in Europe and the United States will be closed later in the day because of Good Friday.
The Nikkei Stock Average of 225 selected issues lost 302.96 points, or 1 percent, closing the morning session at 29,320.24. The index gained 182.92 points Thursday.
The dollar was changing hands at 158.33 yen, up 0.33 yen from Thursday’s close. After opening at 158.27 yen, the currency ranged between 158.22 yen and 158.40 yen.
Shinji Tanaka, a currency dealer with Mitsui Taiyo Kobe Bank, said trading was ″very quiet″ with most players retreating to the sidelines.
On the stock market, the Nikkei index initially fell on index-linked arbitrage selling and then on small-lot selling, securities dealers said.
In arbitrage trading, investors seek to profit from differences between prices of actual stocks and stock index futures.
Yoshihide Koyama, an equity analyst with Nikko Securites, attributed the fall in the index to speculation that Japan’s central bank may raise its official discount rate once again in an attempt to stem the yen’s downswing.
The Bank of Japan raised its key rate last month by 1 percentage point to 5.25 percent. Higher interest rates tend to support a country’s currency, but discourage stock investment.
Government bond prices fell during the morning, boosting interest rates. The yield on the benchmark No. 119 government bond rose to 7.37 percent from 7.295 percent Thursday.