Originally created 02/16/99

Japanese stocks rise for third trading day as dollar falls against yen



TOKYO -- Japanese stocks rose today for the third consecutive trading day, supported by a government decision last week to support major banks with public funds. The dollar slipped against the yen.

The Nikkei Stock Average rose 81.03 points, or 0.58 percent, closing at 14,054.72. On Friday, the index rose 21.29 points, or 0.15 percent.

The dollar bought 114.08 yen in late afternoon trading, down 0.24 yen from its level Friday in Tokyo and also below its New York level of 114.21 yen on Friday.

The Bank of Japan on Friday announced a plan to inject $66 billion in public funds into 15 major banks in an attempt to prevent Japan's banking system from collapsing.

Stocks also got a boost after the central bank said late Friday it was cutting a key interest rate.

The Bank of Japan's policy board lowered its target for overnight call money -- the rate banks charge each other for unsecured short-term loans -- to an all-time low of 0.15 percent from 0.25 percent.

Lower interest rates tend to cut borrowing costs for companies, helping to spur economic activity.

"It is not as though the banks' bad loan problems will be solved with this measure," said Kunihiro Hatae, general manager of the stock division at Tokyo Securities. "But at least it relieves worries about the banks having a capital shortage come the end of the fiscal year in March," Hatae said.

Volume on the exchange's first section was estimated at 338 million shares, down from Friday's turnover of 452 million shares. Advances outnumbered declines 659 to 448, with 173 issues unchanged.

The broader Tokyo Stock Price Index of all issues listed on the first section rose 5.49 points, or 0.50 percent, to 1,095.02. The TOPIX rose 6.44 points, or 0.59 percent, Friday.

In currency dealings, trading remained thin ahead of the U.S. national holiday today and the Chinese New Year holidays in Hong Kong and Singapore on Tuesday and Wednesday.

Traders said the market largely shrugged off other potential market-moving factors today, including rising U.S.-Japan trade friction over steel and figures showing that Japan's current account surplus rose by 13 percent in December from a year earlier, pushing the total for all of 1998 to a record high.

In other currencies, the euro was traded at 128.70 yen, up from 128.54 yen late Friday in Tokyo.

The yield on the benchmark No. 203 10-year Japanese government bond rose to 2.135 percent from Friday's finish of 2.080 percent, driving its price down to 97.39 from 97.81.