Tokyo Stocks Fall, Dollar Higher

Associated Press


TOKYO - The Tokyo stock market's main index fell in its first full trading day of the year Wednesday on profit-taking in banking and technology issues, compounded by Wall Street's overnight decline. The dollar rose against the yen and the euro.

The Nikkei Stock Average lost 80.23 points, or 0.70 percent, to close at 11,437.52 points. The index gained 28.99 points, or 0.25 percent, in a half-day session Tuesday.

The dollar bought 104.74 yen at 5 p.m. Wednesday in Tokyo, up 2.18 yen from late Tuesday and also above the 104.64 yen it bought in New York overnight. The dollar traded between 104.25 yen and 104.88 yen in Tokyo.

On the stock market, profit-taking pulled down banks and other issues after a strong half-day start to the new year Tuesday saw the benchmark Nikkei briefly top the psychologically key 11,500-point level for the first time in more than five months. Over the past month, the Nikkei index has posted a 7 percent gain.

"It's natural that you see many investors wanting to take profits this month," said Yutaka Miura, general manager of the equity information division at Shinko Securities.

High-technology issues Advantest Corp., Pioneer Corp. and TDK Corp. closed lower following the tech-heavy Nasdaq composite index's tumble overnight in New York. Banks Mitsubishi Tokyo Financial Group Inc., Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. also declined, as did some automakers - Toyota Motor Corp. and Isuzu Motors Corp.

The index of all issues on the Tokyo Stock Exchange's first section shed 10.02 points, or 0.87 percent, to finish Wednesday's trading at 1,143.36 points. On Tuesday, the TOPIX added 3.75 points, or 0.33 percent.

First-section volume rose to 1.524 billion shares, from 772.29 million shares on Tuesday's half-day of trading. Decliners outnumbered advancers 1,051 to 434, while 104 issues remained unchanged.

In New York overnight, inflationary concerns drove stocks sharply lower after U.S. Federal Reserve officials hinted that interest rates may have to rise more aggressively to strengthen the dollar and curb inflation.

The Dow Jones industrial average fell 98.65, or 0.9 percent, to 10,630.78. The Nasdaq tumbled 44.29, or 2.1 percent, to 2,107.86, posting its biggest one-day decline since Aug. 6.

In currency trading, the dollar maintained its strength overnight in New York but the dollar-yen activity was hampered by a low amount of orders as many Japanese importers and exporters were only just returning to the market after the year-end holidays, traders said.

Many market participants were also nervous about testing the dollar's downside one day after minutes from the Dec. 14 Federal Reserve meeting showed the central bank is more concerned about inflation than previously suspected.

The euro was trading at $1.3282, down from $1.3440 late Tuesday. The 12-nation European currency was at 138.84 yen late Wednesday afternoon, up from 138.07 yen.

The yield on Japan's benchmark 10-year government bond fell to 1.3900 percent from 1.3950 percent late Tuesday. Its price rose 0.05 to 100.96.

ON THE NET

Tokyo Stock Exchange: http://www.tse.or.jp