Tokyo Stock Market Ends Year at Record High

The world’s richest stock market, outracing other major exchanges in recovering from the 1987 crash, ended 1988 trading today with its major index at a record high, up 42% for the year.

Analysts looked for gains to continue into next year on the Tokyo Stock Exchange, where the start of the six-day New Year holidays began with ritual hand-clapping by 2,000 traders.

In what one dealer described as a “festival market” today, the 225-share Nikkei Stock Average climbed 108.07 points, or 0.36%, and ended the year at a record 30,159.00.

The Nikkei had opened 1988 at 21,217.04. By April, it was at the 27,000-point level, above its highs before the October, 1987, crash. The foundering New York and London markets have yet to regain pre-crash levels.

Analysts said the market climbed despite a number of obstacles, including a massive stock-profiteering scandal, Emperor Hirohito’s illness, currency fluctuations and unstable oil prices.

“There were some negative factors from time to time, but the overall market situation was healthy and bullish throughout the year,” said Mike Morizumi at Merrill Lynch & Co.’s Tokyo office.

Josen Takahashi, a chief economist at Mitsubishi Research Institute, a major think tank, said Tokyo was able to recover faster than other markets from the 1987 crash because of Japan’s brisk economic growth and a calm business environment.

“Japan was in the middle of a historical domestic demand expansion in the fourth quarter of 1987 and the first quarter of 1988,” Takahashi said. “The market crash luckily coincided with that period.”

Analysts said, however, that the rise of Tokyo stock prices was hindered by a major scandal in which dozens of prominent politicians and business leaders were offered unlisted shares in Recruit-Cosmos, a real estate company, at bargain rates. They profited after the stock was publicly offered and rose in price.