Dollar Dives Against Yen on Japan Exchange

The dollar dived against the Japanese yen in Tokyo today as investors became more pessimistic about the U.S. economy, traders said.

The dollar closed at 128.15 yen, down 1.15 yen from Friday’s close of 129.30 yen. It opened at 128.55 yen and ranged between 127.95 and 128.72.

The dollar’s closing was its lowest since 127.63 yen on March 6, 1989.

“The dollar has become less attractive because of growing pessimism over the U.S. economic performance,” a Mitsubishi Bank dealer said.

“The dollar will quickly fall further once it breaks the 128-yen line, which is a resistance point,” said Mamoru Tabata, a dealer with the Mitsui Taiyo Kobe Bank.

Bank of Japan Gov. Yasushi Mieno told a news conference, however, that the market sees little possibility of the dollar plunging.

Mieno also said there had been unavoidable stock price declines reflecting a correction of the “bubble effect” of asset prices.

The Tokyo market’s leading index has declined this year from a record high exceeding 38,900 points at the end of 1989.

But on the stock exchange today, the 225-issue Nikkei stock average surged 719.04 points, or 3.21%, closing at 23,109.20. The index fell 195.47 points Friday.

Traders said the yen’s strength, stability in bond prices and relative calm in the Persian Gulf region contributed to today’s surge in the Nikkei.