Bank-Debt Worries Fuel Nikkei Drop

Japanese stocks edged lower Friday, after a big drop on Wall Street the day before, and the dollar was higher in limited end-of-week trading with most world markets closed for Good Friday.

In Tokyo, the Nikkei declined by 20.70 points, or 0.1%, to finish the week at 18,189.72. The broader Tokyo stock price index was down 0.3%.

Traders said stocks fell as many domestic investors held back over renewed worries about Japan’s banking system. Nippon Credit Bank said Thursday that it was planning to write off bad debts left after the real estate boom of the late 1980s and early ‘90s collapsed.

The activity in Tokyo came after a powerful sell-off on Wall Street on Thursday that sent the Dow Jones industrial average plunging as much as 217 points before recovering somewhat for a loss of 140.11 points to close at 6,740.59.

Fears of further interest-rate increases from the Federal Reserve Board prompted the selling. The Fed raised rates Tuesday for the first time in more than two years to forestall inflation. Higher rates are generally bad for corporate profits, a main driver of stock prices.

Most other stock, bond and currencies markets were closed Friday, so few had the opportunity to react to Wall Street’s dive. U.S. financial markets also were closed.

In Tokyo, the dollar rose to 123.66 yen, up from 123.48 yen in trading in New York on Thursday.

Gold markets in London, Zurich and Hong Kong were closed for the Good Friday holiday.