Dollar, Stocks Decline in Tokyo Trading

The U.S. dollar declined 0.95 yen on the Tokyo foreign exchange market Monday, closing at 128.50 yen. Stock prices fell sharply.

The 225-issue Nikkei stock average, the Tokyo Stock Exchange’s main barometer, lost 294.13 points to move to 22,578.43 at the close of trading. The Nikkei average had advanced 80.43 points Friday. The dollar had opened Monday at 127.90, down 1.55 yen from Friday’s close.

“There is the effect of the New York market’s 140-dollar drop last Friday, but Tokyo’s loss is much smaller than New York’s,” said Hitomi Sakano of Nomura Securities, Japan’s largest brokerage.

“Share prices rose by a large margin last week, so a correction was necessary,” said a dealer at another trading house. “The selling wasn’t all that bad, considering the size of New York’s decline.”

Wall Street lost 140.58 points Friday, the third-largest single-day drop in the Dow Jones industrial average since Black Monday.

The dollar’s lower opening in Tokyo came after four days of consecutive gains against the Japanese yen last week, during which it rose 7.80 yen.

“The yen-dollar exchange rates will seesaw until the announcement of U.S. trade figures for November,” predicted an official of a major Japanese commercial bank in Tokyo. The trade statistics are scheduled to be released Friday.