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Dollar Falls, Japanese Stocks Rise

July 12, 1999

TOKYO (AP) _ The dollar fell against the yen today after Japan’s central bank failed to intervene to prop up the U.S. currency. Stocks surged higher.

The dollar bought 122.14 yen in late afternoon trading, down 0.52 yen from late Friday in Tokyo.

The benchmark 225-issue Nikkei Stock Average jumped 336.45 points, or 1.88 percent, to 18,274.18 points, its highest level since September 1997. On Friday, the average fell 29.92 points, or 0.17 percent.

In currency trading, the dollar fell in Tokyo from its level in New York late Friday after expectations of Bank of Japan intervention went unfulfilled.

Early today, investors bet the Bank of Japan would begin the week with a strong signal to markets that premature yen strength would not be tolerated ahead of an economic recovery, traders said.

Japanese officials have said an excessively strong yen would slow the country’s economic recovery.

As the yen rises against other currencies, exports become more expensive abroad and the yen value of foreign revenue declines.

Japan’s central bank has intervened on three of the last four Mondays to sap the yen’s strength. However, the BOJ did not step in this time.

In stock trading, stocks closed higher on robust gains in international blue-chip shares. Sentiment remained solid amid continued buying from foreign investors and Japanese individuals.

``There was an awful lot of foreign buying in the market today. It is absorbing selling (by institutional investors),″ said Kunihiro Hatae, general manager of the stock division at Tokyo Securities.

Interest in international blue chips including Sony, Fujitsu and Hitachi was especially strong, traders said.

The broader Tokyo Stock Price Index of all issues listed on the first section was up 19.71 points, or 1.35 percent, to 1,484.11 points. The TOPIX closed down 4.69 points, or 0.32 percent, on Friday.

In other currencies, the euro was traded at 124.10 yen, down from 124.97 yen late Friday in Tokyo.

Meanwhile, the yield on the benchmark No. 214 10-year Japanese government bond fell to 1.6350 percent from Friday’s finish of 1.6650 percent, driving its price up to 101.43 yen from 101.17 yen.

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