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Japanese Stock Prices Decline

August 12, 1998

TOKYO (AP) _ Japanese stocks declined for the eighth consecutive session today as investors worried about Wall Street’s woes and possible delays in efforts to shore up Japan’s shaky banking system. The dollar fell against the yen.

The benchmark 225-issue Nikkei Stock Average fell 28.02 points, or 0.18 percent, closing at 15,378.97. On Tuesday, the Nikkei had sunk 219.43 points, or 1.40 percent.

Investors remain worried about dim prospects for a rapid economic recovery and the threat posed by invigorated opposition parties to the government’s proposed rescue package for the financial system, traders said.

``The market can’t find any bullish factors that would prompt buying, except a reversal of the excessively weak yen seen earlier today,″ said Takeshi Kubota, a general manager at Meiko Securities Co.

A 1.3 percent slide overnight by the Dow Jones industrial average, which ended down 112.00 points at 8,462.85, also contributed to the decline on the Tokyo Stock Exchange today.

The broader Tokyo Stock Price Index of all issues listed on the first section declined 6.88 points, or 0.58 percent, closing at 1,180.00. It had fallen 20.21 points, or 1.67 percent, the previous day.

An estimated 426 million shares changed hands on the first section of the Tokyo Stock Exchange, down from 460 million Tuesday. Declines exceeded advances 723 to 380, with 169 issues closing unchanged.

Sakura Bank Ltd. stock fell 2.83 percent to 275 yen ($1.88) after Mita Industrial Co., a big borrower that effectively went bankrupt earlier this week, was found to have routinely falsified its earnings reports.

Meanwhile, the dollar bought 145.92 yen in late trading, down 1.49 yen from late Tuesday in Tokyo and also below its late New York rate of 147.35 yen. It ranged between 145.40 yen and 147.43 yen in today’s trading.

The dollar, which had soared to an eight year high of 147.61 yen Tuesday, was brought down by profit taking triggered by nervousness over the possibility that the central bank might intervene to support the yen.

``There is strong caution against possible intervention″ by monetary authorities, said Takuma Kurosawa, chief foreign exchange manager at Mitsubishi Trust and Banking.

The Finance Ministry’s vice minister for international affairs, Eisuke Sakakibara, suggested Japan was prepared to bolster the sagging yen.

``If it is necessary, we will intervene,″ Sakakibara told Dow Jones Newswires.

Still, some players discounted the likelihood of large-scale yen purchases by the Bank of Japan.

Despite the yen’s modest recovery today, traders said the currency remains vulnerable to selling pressure amid continued instability in Asian markets.

The yield on the benchmark No. 182 10-year Japanese government bond rose to 1.185 percent from Tuesday’s 1.180 percent, driving its price down to 111.87 yen from 111.92 yen.

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