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Tokyo Stock Prices Rise

September 28, 1998

TOKYO (AP) _ Tokyo share prices rose today as investors welcomed news that Japan’s ruling party and opposition had reached an agreement on key banking reform. The dollar also rose against the yen.

The benchmark No. 225-issue Nikkei Stock Average gained 185.53 points, or 1.35 percent, to 13,909.37. On Friday, the Nikkei shed 481.94 points, or 3.39 percent.

The weekend agreement paves the way for passage next month of legislation aimed at cleaning up this country’s troubled financial system.

In currency trading, the dollar bought 135.72 yen in late afternoon trading, up 1.08 yen from late Friday in Tokyo, but below its late New York level of 136.25 yen Friday. The dollar ranged from 134.95 yen to 136.89 yen.

The dollar’s rise, however, was kept in check by investors selling the dollar following the surprise rally in the stock market.

Traders said stocks were also buoyed by an advance on the futures market and buying by public funds.

Today’s gains came despite the application for court protection late Sunday by an affiliate of the troubled Long-Term Credit Bank of Japan, Japan Leasing Corp., the nation’s largest ever corporate bankruptcy.

Shares of Long-Term Credit Bank dived to an all-time low of 9.5 cents per share, before closing at 11 cents, down from Friday’s finish of 18 cents. The bank’s previous record low of 13 cents was recorded on Sept. 18.

LTCB, one of Japan’s largest banks, has been unable to shake off speculation it may collapse under the weight of failed real estate loans.

The market also welcomed the tie-up between Tokai Bank and Asahi Bank as a sign that the banks are getting serious about preparing for government-led ``Big Bang″ financial deregulation, said Sachio Ichikawa at Chuo Securities.

The broader Tokyo Stock Price Index of all issues listed on the first section was up 13.59, or 1.29 percent, to 1,063.52. On Friday, the TOPIX closed down 28.08, or 2.6 percent.

Volume on the first section was about 377 million shares, up from 368.51 million shares Friday. Advancing issues outnumbered declines 778 to 370, with 143 issues unchanged.

Meanwhile, the yield on the benchmark No. 182 10-year Japanese government bond slipped to 0.800 percent from Friday’s finish of 0.815 percent, driving its price up to 109.01 yen from 108.87 yen.