Tokyo Stocks Rise on Banking News
TOKYO (AP) _ Japanese stocks soared Thursday morning on optimism that the government will use public money to aid banks burdened with bad loans. The dollar fell against the yen.
The Nikkei Stock Average rose 545.45 points, or 3.44 percent, to 16,387.91 at midday. The index dropped 5.29 percent, or 884.11 points, on Wednesday for its biggest one-day decline so far this year.
The stock market rallied following news reports that Prime Minister Ryutaro Hashimoto said the government may tap public funds to help Japanese banks saddled with trillions of yen in non-performing loans, reversing his stance for a third time.
Japan’s financial markets have been volatile this week as the government has sent mixed signals over the use of public funds for the ailing banks.
The Tokyo Stock Price Index of all issues listed on the first section climbed 27.03 points, or 2.21 percent, to 1,248.63. It fell 58.43 points, or 4.56 percent, on Wednesday.
Meanwhile, Hashimoto’s latest comment, and its positive impact on Japanese stocks, pushed the yen higher against the dollar.
At late morning, the dollar was traded at 126.54 yen, down 0.38 yen from late Wednesday in Tokyo and also lower than 127.00 in late New York.
The dollar hit a five-year high of 127.42 yen in New York amid concern the Tokyo stock plunge the day before and continued troubles on South Korean financial markets would drag on economic growth in Asia’s two most industrialized economies.
The yield on the benchmark No. 182 10-year Japanese government bond rose to 1.750 percent from 1.705 percent Wednesday, driving its price to 108.59 from 108.93.