U.S. Stock Gain Helps Ignite Tokyo Rally
Prices on the Tokyo Stock Exchange surged during morning trading today, boosted by a sharp rise on Wall Street and the yen’s continued strength against the dollar.
The Nikkei Stock Average of 225 issues rose 777.72 points, or 3.20%, to close the morning session at 25,073.80. The index had gained 191.65 points last Friday.
Japan’s markets were closed Monday for a national holiday.
In currency trading, the dollar was changing hands at 127.65 yen in the late morning, down 0.55 yen from last Friday’s close of 128.20 yen. After opening at 127.50 yen, the currency ranged between 127.40 yen and 127.80 yen.
Today’s opening was the dollar’s lowest since Nov. 26, 1990, when the currency also opened at 127.50 yen.
The benchmark North Sea Brent crude oil for March delivery was being traded at $20.25 a barrel at mid-morning, about the same as overnight closing levels in New York.
On the stock exchange, the Nikkei index rose almost across the board due to momentum carried over from last week’s advance, said Satoru Ishihara, an analyst with Yamaichi Securities.
Ishihara said the index’s surge was encouraged by a sharp 71.54-point advance in the Dow Jones industrial average, the yen’s strength against the dollar and relatively stable bond prices.
“Share prices in Tokyo are chasing after upswings on Wall Street,” he said.
Currency dealers said the dollar opened lower after an overnight decline on overseas markets.
Yukio Matsunaga, a dealer with the Industrial Bank of Japan, said it was difficult to buy dollars amid prevailing expectations of lower U.S. interest rates.
The dollar has fallen recently on speculation that America’s Federal Reserve will move to lower interest rates further to stimulate economic growth.
Matsunaga said traders are waiting for the release of U.S. economic data this week, including January retail sales figures, expected Wednesday, and U.S. trade figures for December, expected Friday.
In bond dealings, the price of the benchmark No. 119 10-year Japanese government bond edged lower to 90.06 points from Friday’s 90.11-point close.
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