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Dollar Slumps to New Low, Stocks Gain

March 22, 1993

TOKYO (AP) _ The dollar edged down to another record low against the Japanese yen today despite gaining against other currencies because of instability in Russia. Tokyo share prices gained moderately.

The dollar closed at 116.02 yen, down 0.08 yen from Friday’s finish in both Tokyo and New York and the lowest Tokyo close since the modern exchange rate system was set up in the late 1940s.

It now has fallen 2.16 yen in Tokyo’s last five trading days and 8.96 yen since Feb. 2.

The dollar opened at 116.24 yen, its high for the day, and ranged as low as 115.88 yen. Spot trading totaled $3.59 billion, down from Friday’s $5.030 billion.

While the dollar gained against the German mark in Tokyo trading, from 1.6404 Friday to 1.6458 today, the instability in Russia didn’t help the U.S. currency against the yen.

A currency trader at the Bank of Tokyo said players were buying yen as a defensive tactic in case the dollar drops back against the mark.

The dollar generally is regarded as a haven in times of international unrest.

On Saturday, Russian President Boris Yeltsin declared a ″special order of government″ until an April 25 national vote of confidence in his leadership to pursue his economic reforms. Russia’s standing legislature, meeting in emergency session on Sunday, took the first step toward impeaching Yeltsin.

On the Tokyo Stock Exchange, the 225-issue Nikkei Stock Average gained 247.22 points, or 1.33 percent, closing at 18,784.39. It had fallen 190.73 points, or 1.02 percent, on Friday.

An estimated 300 million shares changed hands, down from Friday’s 630 million. Gains outnumber losses 626 to 386, while 162 issues were unchanged.

The Tokyo Stock Price Index of all issues listed on the first section closed at 1,413.70, up 7.01 points, or 0.50 percent. It had declined 1.57 points on Friday.

Traders said reports on Friday of expansion in Japan’s broadly defined money supply boosted market confidence and led to widespread buying by foreign brokerages and domestic institutions.

Alex Woodthorpe, a commodities trader at S.G. Warburg Securities, said the news caused a rush of purchases of assortments of index-related shares.

″People were remaining optimistic today because of the money supply news,″ he said. ″People buying in baskets at the close made the market spike 80 or 90 points, and we were already up 150 points or so.″

Woodthorpe said many traders thought the Nikkei average would top 19,000 points by the end of the week.

He said investors were likely to begin selling stocks in ″defensive″ sectors, like pharmaceuticals and food issues, favoring more volatile shares thought to appreciate in cycles, like chemicals and paper stocks.

The benchmark No. 145 10-year Japanese government bonds closed at 109.42 points, down from Friday’s 109.89-point finish. Their yield rose to 4.065 percent from 4.015 percent.

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