TOKYO -- The dollar dropped against the yen today as U.S. banks and Japanese exporters sold the currency after last week's sharp rise. Japanese stock prices were mixed.
The dollar bought 121.78 yen in late-afternoon trading, down 1.16 yen from late Friday in Tokyo and below its New York level of 122.80 yen late Friday.
The benchmark 225-issue Nikkei Stock Average sank 114.95 points, or 0.77 percent, to close at 14,779.05 points. On Friday, the average jumped 710.55 points, or 5.0 percent.
But the broader Tokyo Stock Price Index of all issues listed on the first section rose 1.03 points, or 0.09 percent, to 1,147.75 points. The TOPIX closed up 41.61 points, or 3.76 percent, on Friday.
The dollar rose against the yen last week after Japan's central bank pushed interest rates lower by flooding the short-term money market with funds.
The advance continued in early Asian trading today with the dollar climbing to as high as 123.18 yen, but investors began to sell when the rally appeared to have run out of steam, traders said.
"I returned from lunch and wondered what happened," said Hajime Sato, assistant general manager of the treasury department at Daiwa International Trust Bank. "Apparently, after the dollar failed to touch 123.20 yen, players started profit taking."
The U.S. currency was quoted as low as 121.50 yen in Tokyo.
In other currencies, the euro was traded at 132.09 yen, down from 132.98 yen late Friday in Tokyo.
Tokyo stocks plunged in late trading today, erasing a gain of more than 1 percent in the major index, on worries that the rise in the yen could erode profits for Japanese companies.
In the morning, the Nikkei rose to as high as 15,116.10 -- its first time above 15,000 since Dec. 10 -- following a 5 percent rally on Friday.
But the average fell back on fears a stronger currency could rob Japan's giant exporters of earnings by making their products more expensive and less competitive overseas.
The decline accelerated as some companies sold shares which they hold in affiliated companies -- so-called "cross-shareholdings" -- to boost profits before the fiscal year ends this month.
"There still seems to be a lot of pressure from companies wanting to unwind cross-shareholdings above the 15,000 level," said Kunihiro Hatae, general manager at Tokyo Securities.
Trading on the main section of the Tokyo exchange was estimated at 649.37 million shares, slightly less than the 669.85 million shares traded on Friday. Declines outnumbered advances 658 to 538, while 120 issues were unchanged.
Meanwhile, the yield on the benchmark No. 203 10-year Japanese government bond rose to 1.630 percent from Friday's finish of 1.560 percent, driving its price down to 101.36 yen from 101.94 yen.
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