Stocks Rise, Dollar Slightly Higher
TOKYO (AP) _ Prices on the Tokyo Stock Exchange surged today amid growing anticipation the Bank of Japan will cut interest rates. The dollar edged higher against the Japanese yen.
The 225-issue Nikkei Stock Average gained 519.89 points, or 2.50 percent, ending the week at 21,291.81. On Thursday, the average rebounded 153.62 points, or 0.75 percent, after declining during several consecutive previous sessions to the year’s lowest close.
The Tokyo Stock Price Index of all issues listed on the first section rose 28.25 points, or 1.85 percent, to 1,551.66. The index gained 2.79 points Thursday.
The dollar ended trading at 128.65 yen, up 0.05 yen from Thursday’s close. It opened at 128.58 yen and ranged between 128.35 yen and 128.65 yen.
Benchmark No. 129 10-year Japanese government bonds closed at 105.93, up from Thursday’s 105.78-point finish. Their yield stood at 5.345 percent, down from 5.370 percent.
Kenji Arai, an analyst with Sanyo Securities Co., said expectations of an imminent cut in the discount rate encouraged investors in the stock market. Those hopes were bolstered by Thursday’s release of the January money supply data, which showed a record-low growth of 1.8 percent.
Lower interest rates tend to encourage investment in stocks and bonds.
″Many investors are desperately waiting for the discount-rate cut. They fear economic recovery may take longer than they had expected because of the recent (financial) scandals and news of poor corporate performances,″ said Masashi Wakabayashi of Yamaichi Securities Co.
He said index-linked arbitrage buying also pushed up the Nikkei index.
Stock traders said other factors behind the surge included an overnight firming of the Dow Jones industrial average and bargain hunting for high- technology shares. High-tech issues plunged earlier this week on financial reports predicting lower earnings for leading electronics makers this year.
Volume on the first section was estimated at 200 million shares, up from 196 million shares Thursday.
Gaining issues overwhelmed declining issues 807 to 188, while 133 issues remained unchanged.
In currency dealings, the dollar was confined to a narrow range as dealers watched for intervention by the central bank to halt its rise against the yen, said Naozumi Tsutsumi, a Daiwa Bank dealer.
Demand for the dollar remained strong because of the market’s growing optimism about the U.S. economic recovery, as well as demand by Japanese firms for settling overseas accounts by the end of fiscal 1991 on March 31, dealers said.