Advertisement

Tokyo Stocks Rise Along With Faith in Bailout

From Times Wire Services

Stock prices in Tokyo advanced Thursday on growing optimism a taxpayer-funded bailout will nurse Japan’s troubled financial industry back to health. The dollar rose against the yen.

The benchmark 225-issue Nikkei stock average rose for a second straight trading day, gaining 375.12 points, or 2.51%, to close at 15,300.10. On Wednesday, the average advanced 125.58 points, or 0.85%.

“The stock market is finally reacting to a series of government measures to stabilize the financial system,” said Sachio Ishikawa, general manager of the stock division at Chuo Securities Co.

Prime Minister Ryutaro Hashimoto’s governing coalition agreed Wednesday to add further to a bailout package that now earmarks a total of $231 billion in public funds for bolstering the banking system. In addition, the Finance Ministry has decided to ease requirements to shore up banks’ capital reserves.

Advertisement

Confidence in the stability of the financial system had been eroded by a string of financial institution failures over the last few weeks and the persistent problem of heavy debt loads at financial companies. That had sent down the Nikkei stock index to more than 2 1/2-year lows in recent trading.

The benchmark average surged more than 800 points in early afternoon trading after Kyodo News reported Hashimoto suggested further reductions in corporate taxes during a midday speech to business leaders.

Stocks later retreated from intra-day highs as doubt spread over whether Hashimoto had made a specific tax-cut pledge.

The broader Tokyo Stock Price Index of all issues listed on the first section of the Tokyo Stock Exchange rose 27.64 points, or 2.44%, to close at 1,162.23. The index had gained 4.59 points, or 0.41%, on Wednesday.

Advertisement

An estimated 538 million shares changed hands on the first section, down from 544.28 million issues Wednesday.

Rising stocks outnumbered decliners 951 to 241 and 102 shares closed unchanged.

Shares of banks were among the biggest advancers Thursday, with banking issues listed on the first section of the Tokyo Stock Exchange rising 2.2% as a group. Many blue-chip auto exporter stocks also rose.

Auto maker issues rose after the Japan Automobile Manufacturers Assn. said auto exports increased for the 18th straight month in November thanks to a weaker yen and strong demand in the U.S. and Europe for sport-utility vehicles.

Advertisement

Toyota rose 130 yen to 3,690. Honda rose 70 yen to 4,730.

Other big exporters rose as investor concern over the impact of South Korea’s economic and currency crisis was calmed by news that the International Monetary Fund, the U.S., Japan and 11 other nations decided to accelerate $10 billion in new loans to South Korea.

The loan package was intended to encourage foreign banks to roll over loans to Korean borrowers.

Meanwhile, the dollar bought 130.25 yen in afternoon trading on the Tokyo foreign exchange market Thursday, up 0.33 yen from late Wednesday in Tokyo and also above its late New York rate of 129.85 yen overnight.

Advertisement

Traders said activity remained thin as many overseas market players were off for Christmas. The dollar’s upswing came despite worry Japan’s central bank might intervene to stem the yen’s fall while fewer traders are in the market, traders said.


Advertisement
Advertisement