Tokyo share prices turned lower April 10, with the just-announced package of economic stimulus measures going largely unheeded. The dollar also fell sharply against the yen amid indications the Bank of Japan returned to the currency market to keep the Japanese currency from falling.
Snapping a four-day rise, the benchmark 225-issue Nikkei average fell 55.54 points to end the day at 16,481.12.
Investors reacted with disappointment to stimulus measures announced by Prime Minister Ryutaro Hashimoto late Thursday, brokerage officials said. The market had got wind of the package and there was little positive surprise, said Mamoru Shimode, strategist at Deutsche Morgan Grenfell Capital Markets Ltd.
Hashimoto failed to elaborate on details of the package and how he intends to circumvent the recently enacted fiscal reform law, Shimode said. It might be a case of buying on rumor and selling on the news, he said. Hideaki Akimoto, chief strategist at Daiwa Institute of Research, agreed, citing lingering worries about bleak economic and corporate earnings prospects as a major factor behind demoralized investor sentiment.
On the currency market, the dollar changed hands at 129.01-05 at 5 p.m., compared with 132.12-15 yen late Thursday, after hitting an intraday low of 127.40 yen, its lowest since early last months. The intervention by Japanese monetary authorities was anticipated amid reports the BOJ sold dollars for yen in New York currency trading overnight.
On April 10 a senior Finance Ministry official said Japan will continue to take appropriate action in foreign exchange markets to correct the excessive weakness of the yen. “We’ve still got a gun, and it’s still loaded,” the official said a day after the ministry formally said it had intervened to stop the yen’s fall against the dollar.
The official also noted that other Asian currencies were also firming up against the dollar, and that such a situation was beneficial not only to Asia but also to the United States, because it would help correct trade imbalances.
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