Kim’s Death, G-7 Meeting Likely to Hit Tokyo Stocks : Markets: Some predict a 300-point drop. Dollar resumes its fall after industrial nations show no signs of a rescue.

Stocks are expected to decline today in Tokyo following the death of North Korea’s leader and a disappointing meeting of the Group of Seven nations this weekend that yielded little support for the sagging dollar.

After leaders of the world’s major industrial countries failed to come to its rescue, the dollar resumed its decline against the yen. The dollar opened at 98.30 yen on the Tokyo foreign exchange market today, down 0.23 from Friday’s close.

But the market’s focus today in Japan is likely to be on Friday’s death of 82-year-old North Korean President Kim Il Sung.

“The most important news, obviously, is North Korea,” said David Harris, a Japanese equity salesman at Barclays de Zoete Wedd.

“The fact that this does create uncertainty is not good for the market at all, and with the stronger yen today, I think we could see this trading down 300 points,” he said.

Kim died just two weeks before a historic summit with South Korean President Kim Young Sam aimed at paving the way for increased economic ties on the peninsula.

While tension over North Korea’s suspected nuclear weapons development program has led to a stronger dollar in the past, currency traders in Tokyo expect any rebound in the dollar to be limited. That’s because any gains will be met with more dollar selling by Japanese exporters to repatriate profits earned overseas.

A weaker dollar typically is bad news for stocks because a stronger yen cuts into profits at Japan’s big-name exporters and makes fixed asset investments such as bonds more attractive.

On Friday, share prices declined amid concern that the G-7 nations would do little to shore up the dollar. The benchmark Nikkei 225-stock average dropped 93.51 points to 20,526.51.

Over the weekend, the G-7 nations showed restraint in supporting a stronger U.S. currency. The countries’ finance ministers said a further weakening of the dollar against the yen and European currencies is “not desirable,” but they failed to announce a joint plan to defend the greenback.

In company news, the Japanese government has decided to comply with a U.S. request that Japan submit “voluntary” measures to increase overseas procurement by Nippon Telegraph & Telephone Corp., the Nihon Keizai newspaper said Sunday. Japanese trade negotiators have been resisting the U.S. government’s request to do so, citing NTT as a private company.

Japan’s major trading companies plan to set up holding companies in China as part of their efforts to increase direct investment in the country, the Nihon Keizai newspaper said. Mitsubishi Corp. has filed a request with the government for permission to set up such a company in Shanghai. Mitsui & Co. is considering a similar move in Beijing. Itochu Corp. set up a holding company in Beijing last year.

Toyota Motor Corp., the largest Japanese car maker, will start operation of its new plant in Australia on July 18, the Nihon Keizai newspaper said. The plant, located in a suburb of Melbourne, will supply cars for export to Asia.

Japan’s major steelmakers are reducing the number of engineers by attrition and transfer to affiliates as part of their cost-cutting efforts, the Nihon Keizai newspaper said. Nippon Steel Corp. the world’s largest steelmaker, will cut the number of engineers by 30% to 40% from the current level, the paper said.

Nikkei stock index futures for June delivery fell 130 points to 20,620 in Osaka and declined 130 points to 20,620 in Singapore.