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Tokyo Stocks Higher in Early Trading

June 25, 1999

TOKYO (AP) _ The dollar inched down against the yen in Friday morning trading, erasing initial gains caused by speculation that the U.S. Federal Reserve may raise interest rates. Japanese stocks were mixed.

The dollar bought 121.88 yen by late morning, down 0.02 yen from late Thursday in Tokyo but above its late New York level of 121.78 yen.

The benchmark 225-issue Nikkei Stock Average lost 64.88 points, or 0.37 percent, to end the morning session at 17,563.44. On Thursday, the average closed up 41.57 points, or 0.24 percent.

The dollar started out slightly higher on expectations that the Fed’s Open Market Committee, meeting next Tuesday, might raise its benchmark short-term rate.

The dollar also got a slight temporary boost from a comment by Eisuke Sakakibara, Japan’s vice finance minister for international affairs, that seemed to show Tokyo supports a weaker yen.

``There is no change in our foreign exchange policy. Our resolve is very firm,″ Sakakibara told reporters.

But by late morning, the dollar was little changed from late Thursday in Tokyo.

The Bank of Japan has intervened four times over the past two-week period to halt recent gains by the yen, which will hamper the Japanese economy’s ability to recover from its worst recession since World War II. A stronger yen makes Japanese exports more expensive abroad.

In other currencies, the euro was traded at 126.90 yen, up from 126.30 yen late Thursday in Tokyo.

On the stock market, share prices were mixed, despite the decline on Wall Street. In New York Thursday, the Dow Jones industrial average fell 132.03, or 1.2 percent, to 10,534.83, as blue-chip shares dropped on fears of an increase in interest rates.

``The market is holding up well in spite of New York’s fall,″ said Toshiyuki Higashi, manager of investment information at Taiheiyo Securities Co.

The broader Tokyo Stock Exchange of all issues listed on the first section was up 2.11 points, or 0.15 percent, to 1,413.24. The TOPIX closed up 1.95 points, or 0.14 percent, the day before.

The yield on the benchmark 10-year Japanese government bond rose to 1.7350 percent from Thursday’s finish of 1.6950 percent, driving its price down to 100.56 yen from 100.91 yen.

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