Tokyo Share Prices Rally; Dollar Falls Against Yen : Stocks: Wall Street’s gains and index-linked buying are credited for Nikkei’s fourth-biggest single-day jump in 1991.

Prices soared Wednesday on the Tokyo stock exchange on index-linked buying and rallying New York stock prices. The dollar slipped against the Japanese yen.

On the stock market, the 225-issue Nikkei stock average recorded its fourth-biggest single-day gain of the year at 796.64 points, or 3.68%, to close at 22,461.17 points.

A total of 240 million shares exchanged hands on the first section, little changed from Tuesday’s 238.3 million. Gaining issues outnumbered declining issues 737 to 252, while 138 remained unchanged.

The Tokyo stock price index of all issues listed on the first section, which shed 10.10 points Tuesday, closed at 1,675.33 points, up 37.27 points, or 2.28%. First section issues are shares in Japan’s larger publicly traded companies.

The dollar closed at 127.00 yen, down 0.25 yen from Tuesday’s close. After opening at 127.45 yen, it traded between 126.75 yen and 127.45 yen. Spot trading totaled $2.5 billion, down from Tuesday’s $5.12 billion.

Stock dealers said index-linked buying pushed share prices up, producing the Nikkei’s first rebound in six trading days. The Nikkei rose above 22,000 points for the first time since a week ago.

“It was an easy day for the Nikkei to rebound today, especially in thin trading,” said Masunori Ishitobi, an analyst at Sanyo Securities Co.

He said the healthy stock market in New York, where the Dow Jones industrial average has risen more than 116 points in two days, and strong Japanese bond prices also boosted market sentiments.

But many market players had a wait-and-see attitude ahead of the New Year holidays, traders said.

Buying was also encouraged by expectations of lower interest rates based on a government report acknowledging for the first time that Japan was entering a recession.

The central bank has been resisting calls for a rate cut, but traders anticipate one after President Bush visits Japan on Jan. 7 through 10. Bush is expected to ask Japan to ease credit to boost imports.

As was expected, however, Bank of Japan Gov. Yasushi Mieno had no surprises in his remarks Wednesday about currency levels. He said the central bank was not ready to change its monetary policy, choosing to watch the situation carefully to achieve non-inflationary “well-balanced” growth.

The market shrugged off a report Wednesday that turnover on the Tokyo exchange’s first section was forecast to be the lowest in nine years.