Japanese Stocks Advance After Takeshita Resigns

Share prices advanced in Tokyo this morning on the expectation that Prime Minister Noboru Takeshita’s resignation will clear the air of the Recruit scandal, brokers said.

Takeshita confirmed at a midday press conference that he will step down after Parliament passes the government’s 1989-90 budget. That is likely to occur by late May. The budget has been stalled in Parliament since March because of a boycott over the scandal by the opposition.

The 225-share Nikkei index climbed from the opening on speculation Takeshita would quit and then pushed higher when news came that leaders of the ruling Liberal Democratic Party had actually accepted his offer to go.

“Once he is out, the LDP can unify,” said Jeff Uscher, head of research at Smith New Court. “The budget will be passed and Recruit will pretty much be behind us.”

The index was up 250.47 points, or 0.76%, at 33,056.39 at midday. It had fallen 223.89 points Monday, which marked the third straight session of declines.

The dollar eased in morning Tokyo trade to 131.27 yen, against 131.55 yen at Monday’s New York close.

Takeshita and other LDP leaders were among dozens of public figures who received cut-rate shares and large donations from the Recruit Co., a telecommunications firm.