Fears over Japan’s economic weakness on Monday helped push the dollar past 146 yen and pull Tokyo stock prices below the psychologically important 15,000 line for the first time in five months.
At 5 p.m., the dollar traded at 146.43-46 yen, up from 144.01-04 yen the same time Friday and from 144.15-25 yen late Friday in New York. It was the first time for the dollar to hit 146 yen since August 1990.
The 225-issue Nikkei average ended the day at 14,825.17, down 197.16 points from Friday’s close at 15,022.33. The level is the lowest since Jan. 13.
Market players lack reasons to hold onto the yen with the economy in the doldrums, dealers said. On Friday, the government announced that the economy shrank 0.7 percent in fiscal 1997.
Taku Yamasaki, policy chief of the ruling Liberal Democratic Party, on Monday again hinted that Japanese authorities will step into the currency market to buttress the sagging yen. “The government and the LDP will consider arranging (for financial authorities) to intervene to maintain the exchange value of the yen,” Yamasaki was quoted by LDP officials as saying.
Yamasaki made the remark at a meeting with Singaporean Ambassador to Japan Chew Tai Soo. Chew urged Yamasaki to take action to arrest the yen’s fall, saying a further depreciation in the yen might trigger turbulence in the Asian currency market and further falls in the region’s currencies, the officials said.
In Sydney, Hong Kong Chief Executive Tung Chee Hwa appealed to Japan to “get on with” boosting its economy, because the depreciation of the yen is having an “enormous impact” on Hong Kong and the region.
Tung told a business luncheon in Sydney there was little regional leaders could do about the Asian financial turmoil while the yen was low. “We can only appeal to the Japanese to do whatever is needed to produce a stable yen and a strong Japan,” he said.
Stocks lost ground overall last week due to the yen’s nosedive against the dollar, but market watchers said the urge to sell Japanese stocks was slowly dissipating. “The market is moody, and now there seems to be a little bit of resistance (among investors) against the yen’s fall,” said Yasuo Ueki, financial products general manager at Nikko Securities.
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