The dollar continued plummeting against the yen Thursday morning in London, briefly dropping to the 114 level for the first time since July 1997 on stop-loss sales by U.S. hedge funds.While the yen’s sudden muscle is a mixed blessing for Japan — it hurts exporters but helps banks struggling to maintain internationally acceptable capital adequacy ratios — a nosedive by Tokyo share prices spelled only bad news.On the Tokyo Stock Exchange, the 225-issue Nikkei average ended 799.55 points, or 5.8 percent, lower at 13,026.06, an about-face from Wednesday’s 803.97-point rise.After being quoted at 121.35-38 yen at 9:30 a.m. in London, the dollar’s plunge accelerated below 115 yen around 11:30 a.m. The U.S. currency was quoted at 122.35-38 yen at 5 p.m. in Tokyo, down from 128.17-20 yen late Wednesday.U.S. hedge funds were dumping dollars in London to limit losses following the yen’s rapid appreciation in overseas markets, dealers said. Tokyo bank officials blamed the dollar’s precipitous fall largely on selloffs by overseas investors. Akira Narumi, an analyst with Sakura Investment Management Co., also cited U.S. hedge funds’ actions as a key factor moving the foreign exchange markets.
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