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The Tokyo stock market has remained in a corrective phase through much of this month, sending the key Nikkei average slumping to its year-to-date low.

Companies have stepped up stock sales and unwound their cross-shareholding ties ahead of Sept. 30 book-closings for the fiscal first half.

Fears of contagion from the slide on Wall Street and elsewhere also weighted on investor sentiment.

Worries about the steep runup in crude oil prices and the beleaguered euro have fueled fears of inflationary pressures and higher interest rates in the United States, sending New York share prices reeling.

Although further volatility may be inevitable in the near term, the Tokyo market could pull itself out of the doldrums in the coming month.

The market has taken comfort from the outcome of the Sept. 23 meeting of finance leaders from the G7 industrial nations in Prague.

The G7 meeting came close on the heels of the concerted currency market intervention by the European Central Bank, the U.S. Federal Reserve and other central banks to shore up the euro.

And then came news that U.S. President Bill Clinton has ordered the release of oil from the Strategic Petroleum Reserve, a move aimed at reining in oil prices.

Worries about high oil prices and a weak euro have been put to rest, at least temporarily, allowing market participants to shift their attention to corporate earnings prospects.

With high-technology companies showing the way, many firms are racing to their best year in a decade.

Indeed, private think tanks are forecasting double-digit profit increases for the coming business year on top of solid increases in both pretax profits and sales for the current year.

The improved external environment could presage a more stable market in the coming months.

There appears a good chance that foreign investors, net sellers this month, will step up purchases of Japanese stocks, counting on favorable economic and corporate earnings prospects.

Among domestic investors, institutional ones appear to be gearing up for increased purchases, as are individual players.

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