Originally created 06/12/04

Tokyo stocks down, dollar up against yen



TOKYO -- Tokyo stocks fell Friday amid concerns that China, a major customer for Japanese goods, could move more rapidly to slow its booming economy. The U.S. dollar rose against the Japanese yen.

The Nikkei Stock Average of 225 stocks fell 49.15 points, or 0.42 percent, to close at 11,526.82 points. On Thursday, the benchmark climbed 126.23 points, or 1.10 percent.

The dollar was quoted at 110.22 yen by late afternoon Friday, up 0.07 yen from late Thursday but below the 109.32 yen it bought in New York.

On the stock market, strong economic data from China prompted Japanese stocks to fall.

China's retail sales rose 17.8 percent in May from a year ago, marking the third straight month of increase, the National Bureau of Statistics said Friday.

The bureau also said China's consumer price index rose 4.4 percent in the same month, prompting speculation that authorities may raise interest rates in order to curb inflation. Beijing has said repeatedly that it intends to rein in its economy to avoid overproduction and supply gluts.

"With Chinese officials saying they're ready to raise interest rates if the CPI gets above 5 percent, Japanese stocks fell," said Mitsuo Imaizumi, deputy general manager of foreign exchange at Daiwa Securities SMBC.

Higher interest rates makes loans more expensive, and discourages people from spending money. Many of Japan's exports make their way to China, and Japanese companies would be hurt if Chinese customers became more tight-fisted.

Retailers FamilyMart, Ito-Yokado and Isetan were among the decliners as were consumer product and cosmetics manufacturers Kao and Shiseido.

Bank shares bucked the trend, with Mizuho, Mitsubishi-Tokyo Financial, Sumitomo Mitsui and UFJ all climbing.

In Tokyo, the broader index of all issues on the Tokyo Stock Exchange's first section fell 1.76 points, or 0.15 percent, to 1,160.30 points. The index climbed 9.29 points, or 0.81 percent, on Thursday.

In other currencies, the euro fell to $1.1998 in Tokyo late Friday from $1.2060 late Thursday. Against the yen, the euro rose to 132.14 yen from 132.03 yen.

In the bond market, Japan's benchmark 10-year government bond price yield rose to 1.7800 percent from 1.7600 percent late Thursday. Its price, which moves inversely to its yield, fell 0.16 to 98.47.

On the Net:

Tokyo Stock Exchange: http://www.tse.or.jp