Stocks Surge, Dollar Finishes Lower
TOKYO (AP) _ Prices on the Tokyo Stock Exchange surged in heavy trading today as players welcomed reports about a larger-than-expected government economic stimulus package. The dollar fell against the Japanese yen.
The 225-issue Nikkei Stock Average gained 415.79 points, or 2.37 percent, closing the week at 17,970.79.
On Thursday, the index jumped 1,013.35 points, or 6.13 percent, on expectations of major economic measures to be announced by the government late today.
The measures were expected to total more than $81.3 billion, compared to an originally expected $48.4 billion.
The broader Tokyo Stock Price Index of all issues listed on the first section rose 39.52 points, or 2.95 percent, to 1,379.97. The TOPIX gained 63.07 points, or 4.94 percent, on Thursday.
An estimated 850 million shares changed hands on the first section, up from Thursday’s 630 million shares. It was the highest daily turnover since March 8, 1991, when volume totaled 852 million shares.
Following Thursday’s sharp rally, the Nikkei average fell back on profit- taking early Friday, but bounced back quickly after media reports gave more details about the expected economic package, said Tomoatsu Yamamuro, an analyst with Yamaichi Securities Co.
″The market is regaining its strength,″ Yamamuro said. ″It’s clearly reflected in the volume.″
He said both institutional and individual investors bought actively. But continuing uncertainties, including declining corporate profits caused by the nation’s slowing economy, remain unchanged, Yamamuro added.
The Nikkei rose despite the sudden resignation of governing party Vice President Shin Kanemaru in connection with a major scandal.
After the stock market closed Thursday, Kanemaru told a news conference that he was stepping down from the No. 2 post of the Liberal Democratic Party and admitted he had received $4 million from the former president of a trucking company. The company allegedly sought to buy influence in the government.
Kanemaru’s office reportedly failed to report the donation to the Home Affairs Ministry as required under the nation’s political funds control law.
On the foreign exchange market, the dollar ended the week at 123.60 yen after falling 1.35 yen from Thursday’s close and sinking below its overnight New York finish of 124.82 yen. After opening at 124.82 yen, its high for the day, it ranged as low as 123.00 yen.
Spot trading totaled $14.04 billion.
The yen strengthened with the gain on the stock market, traders said.
Meanwhile, the price of Japanese government bonds tumbled as hopes of a discount rate cut and additional money flowing into the bond market faded because of the stock market’s favorable reaction to the government package, bond dealers said.
″Investors had expected a lower discount rate as a measure to save the falling stock market. With stocks recovering, there is no reason for one,″ said Toshiaki Kitahara, a bond analyst with Okasan Securities Co.
The benchmark No. 129 10-year Japanese government bonds closed at 108.99 points, down from Thursday’s 109.84-point finish. Their yield rose to 4.770 percent from 4.630 percent.